NEWS:
Friday July 30, 4:26 am Eastern Time
INTERVIEW - Bugs Bunny to hawk milk in Shanghai
By Nailene Chou Wiest
SHANGHAI, July 30 (Reuters) - Bugs Bunny and his cartoon character friends will entice Chinese children to sip milk from gable-topped cartons in Shanghai next month.
Roy Warren, head of China Peregrine Food Corp (OTC BB:CHPF - news), a U.S. firm based in North Palm Beach, Florida, said it was set to launch a new line of Looney Tunes beverages in China under licence from Warner Bros. a part of Times Warner Inc. (NYSE:TWX - news).
''To ride on the coattail of Warner Brothers on its entry to China gives us the product differentiation we need,'' he said.
Instead of spending a huge sum on establishing a brand name, the company is paying by the unit for well known cartoon characters, he said in an interview on Friday.
If the marketing campaign went well, toothy Bugs Bunny -- ''Tu Bage'' in Chinese -- would win the hearts of Shanghai children and open the wallets of their parents, Warren said.
China Peregrine, which has no connection with Hong Kong's Peregrine Investments which folded two years ago, owns a 70 percent share in Shanghai dairy processing plant and a 52 percent share in one in the eastern city of Hangzhou.
Citing market research by the Gallup Organisation, Warren said China's consumption of liquid milk grew 30 percent and of milk products by 15 percent in 1997.
Shanghai had by far the largest per-capita milk consumption in China, double the national average, he added.
Warren said Peregrine's Happy Family brand, with less than five percent of the Shanghai dairy market, was the only pasteurised milk available.
Other brands offered milk processed at ultra high temperatures which he said tend to destroy some nutritional values.
According to official figures, China's per capita dairy consumption is a meagre 6.4 kg per year, compared to a world average of 105 kg.
The Looney Tune line of milk products, priced at three yuan ($O.36) for 200 ml, would be about 20 percent higher than similar products on the market.
Warren said China's entry into the World Trade Organisation would be a boost to his company as import tariffs would drop and if that happened China Peregrine would extend its business.
''In the milk business, we have our storage and distribution system that provides a certain resource for the entry of other products,'' he said.
China has put its key WTO entry talks with the United States on hold over NATO's May 7 bombing of Beijing's embassy in Belgrade. It says it is awaiting a satisfactory U.S. explanation for what Washington says was a mistake stemming from bad intelligence.
In the first quarter of this year, China Peregrine reported a loss of 18 to 20 cents per share on sales of $2.5 million.
The second quarter results, due to be released soon, were likely to show even larger losses due to the launching of the new products, Warren said.
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