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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (3402)	7/23/2004 9:18:54 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

good news--BAT Has No Approval for China Factory, Ministry Says (Update3) July 23 (Bloomberg) -- British American Tobacco Plc, the world's third-largest cigarette maker, doesn't have approval to build a cigarette plant in China, the top planning ministry said, backing a statement by the nation's tobacco monopoly. ``There's no basis for British American's claim it got permission,'' said Wang Wei, the official for tobacco in the National Development Reform Commission. ``We didn't support its proposal, and we won't support it.'' The London-based company said today it remains ``extremely confident'' that it has the necessary permission to build the biggest overseas-funded tobacco factory in China, capable of making 100 billion cigarettes a year. It stuck by an earlier statement after China's State Tobacco Monopoly Administration, which reports to the reform commission, twice denied approval was given. BAT received permission from the central government, said Teresa La Thangue, a spokeswoman. BAT said the State Council, China's cabinet and nation's top policymaking body, approved its plans. The council is presided by Premier Wen Jiabao. The reform commission reports to the council. The State Council declined to comment, referring all questions to the State Tobacco Monopoly. ``British American Tobacco should produce documents backing its claim,'' said Wang. He said the reform commission has been contacted on behalf of the company by local governments in provinces where British American was looking for factory sites. Open-Door Policy China Eastern Investment Corp., the mainland importer that British American said would be its partner in the new factory, didn't return calls seeking comment. At stake is whether China is willing to begin breaking up a monopoly that controls a $31 billion market selling 1.8 trillion cigarettes to 350 million people in the world's biggest nation of smokers. That's quadruple the cigarettes consumed in the U.S. China agreed when it entered the World Trade Organization at the end of 2001 that it would open its markets to foreign competition. Tobacco, like the media and telecommunications, is among the markets that remain mostly closed to foreign investors. New York-based Altria Group Inc., the owner of the world's biggest cigarette maker Philip Morris, also wants to produce cigarettes in China, Chief Financial Officer Dinyar Devitre told investors Tuesday. Altria doubts British American received permission to produce cigarettes in China, Devitre said. ``If these reports are correct, it effectively means that the main underpinning of the China tobacco monopoly system has been dismantled,'' Devitre said during a conference call. ``We doubt this is the case. Access to the Chinese market is going to be a long march.'' quote.bloomberg.com