China Joint Venture

Tesco PLC
14 July 2004


14 July 2004

           TESCO ENTERS CHINA THROUGH A JOINT VENTURE WITH TING HSIN

Tesco PLC today announces that it has signed a 50:50 joint venture agreement
with Ting Hsin, for its wholly owned subsidiary of Ting Cao, which owns the
Hymall chain of stores in China. Tesco will acquire 50% of Ting Cao's equity in
Hymall for £140m (US$260m) cash, valuing the whole business at £280m (US$520m).
The transaction is expected to complete within four months.

Hymall currently operates a chain of 25 hypermarkets with plans to open up to 10
more stores in the coming year. It is a profitable business with sales of £330m
(US$613m) and profit after tax of £5.5m (US$10.1m) in 2003. The sales are
forecast to be over £450m (US$833m) in 2004.

International growth forms a key segment of Tesco's four part strategy. This
joint venture represents Tesco's move into China, a market Tesco has been
researching for a number of years. The Hymall hypermarkets average 89,000 sq. ft
(8,300 sq. m.) in size with most located in high quality shopping mall
developments. Hymall's stores serve around 2 million customers each week and are
mainly located in the east, north and northeast of China (Shanghai, Hangzhou and
Ningbo in the east; Tianjin, Shenyang and Dalian in the north).

Both parties are committed to growing the business together. Ting Hsin, one of
China's leading consumer food and beverage producers, will bring their extensive
local knowledge and operating expertise gained not only from Hymall but also
from their wider business interests in China. Tesco will add its supply chain,
product development and store operations expertise to improve the shopping
experience for customers.

Tesco Chief Executive, Sir Terry Leahy, said:
'China is one of the largest economies in the world with tremendous forecast
growth and a market we have researched extensively over the last three years.
Ting Hsin is a business with an excellent team that puts the customer at the
heart of their operations and shares many of our values particularly in the
approach to their people. We believe Ting Hsin is the right partner and Hymall
is the right store chain for our strategic move into this exciting market. It is
also a tremendous opportunity to acquire a 50% stake in an established and
profitable local business with strong local management. Hymall is already a
leading retailer in Shanghai, China's largest retail market and the chain of 25
hypermarkets provides an excellent base of stores from which we can grow
together.'

Ting Hsin Chairman, Wei Ying-Chiao, said:
'Hymall has been a successful and profitable business under Ting Hsin since we
opened our first store six years ago. Our current management and employees are
vital to Hymall's achievements to date and continued future success. This
strategic partnership with Tesco will bring new management expertise and
technology know-how to help grow the business even further. Both partners are
highly committed to making Hymall the retailer of choice for customers. This
alliance enables Hymall to strengthen its position as one of the leading
hypermarket operators in China.'

CONTACT

Press           Lucy Neville-Rolfe               [phone]
                Maitland                         [phone]
                Tesco Press Office               [phone]
Investors       Steve Webb                       [phone]

£1=US$1.85
£1=Rmb15.34

Tesco PLC was advised in this transaction by Morgan Stanley.
Ting Hsin International Group was advised in this transaction by JPMorgan.

NOTES FOR EDITORS

ABOUT TESCO

Tesco is the UK's largest retailer. We have reached this position through our
Four part strategy for growth:

1. We focus on a strong Core UK business by offering customers excellent
   value, choice and convenience

2. We aim to be as strong in non-food as we are in food

3. We follow the customer into new areas of retailing services such as
   financial services (Tesco Personal Finance), internet shopping (Tesco.com) 
   and telephony (Tesco telecom).

4. We want to be an international retailer with a long term strategy for
   growth.

The Tesco Group has turnover of £33,557 million with profits of £1,708m. We have
2,318 stores and employ 326,000 people in the 12 countries in which we operate.
In Europe, outside the UK, we operate in Ireland, Hungary, Poland, Czech
Republic, Slovakia and Turkey where we have 261 stores and 55,000 employees. In
Asia we have 179 stores and 34,000 employees across our businesses in Thailand,
S. Korea, Taiwan, Malaysia and Japan. We are the market leader in 6 of the
countries we trade in. Wherever we operate we have one core purpose 'Creating
value for customers to earn their lifetime loyalty' and two values 'No-one tries
harder for customers'; 'Treat people how we like to be treated' that direct how
we operate.

ABOUT HYMALL

Hymall Commercial Retail Group is a leading hypermarket retail operator in the
Northeastern region of China. It opened its first hypermarket in September 1998
and currently operates 25 stores nationwide. Hymall focuses its business in
Shanghai, Hangzhou and Ningbbo in the eastern China and Tianjin, Shenyang and
Dalian in the northern China. It is already a leading retailer in Shanghai with
10 hypermarkets. Hymall has achieved turnover of £330m with profit of £5.5m in
2003. Hymall Group is owned by Ting Hsin International Group, a leading consumer
product producer in China with businesses in instant noodle, beverage and bakery
products.

ABOUT CHINA

China has a population of 1.3bn and is the Sixth largest economy in the world
with a GDP of US$1,447bn (£780bn) and has 9 cities with populations greater than
3 million. It is an economy that has seen tremendous growth with real GDP
growing 8% per annum between 1999-2003. This growth is expected to continue at
8%pa between 2003-2008 and people are expected to become wealthier with real
disposable income expected to grow at 9%pa over the same period. The currency is
the Renminbi and the exchange rate is £1=15.34Rmb or US$1=8.277RMB




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