According to Jiang Xingzhou, general manager of the sales branch of Jianlibao Group, the potential partner is a beverage company from Britain that holds one of the best selling brands in Europe.

But Jiang would not reveal the company's name.

"The related agreement will be signed by the end of this year and we will try to put out products before Spring Festival, the Chinese lunar New Year," he said.

The tentative co-operative will not involve company shares.

The unnamed giant will provide its brand and abundant capital, while Jianlibao is responsible for production and marketing, Jiang said.

"If the co-operation goes smoothly, we will export our Jianlibao-branded beverage to Europe," he said.

It is the latest move for the national beverage brand name to enhance its position in the industry since its majority shareholder changed in January.

Jianlibao Group, one of China's largest beverage companies, has sold most of its shares to a domestic investment company.

The Zhejiang International Trust and Investment Company agreed to pay 338 million yuan (US$40.9 million) for 75 percent of the shares from the Sanshui city government in South China's Guangdong Province.

Zhejiang International will also take on Jianlibao's debt of 1.5 billion yuan (US$181.3 million).

The deal came as a surprise as several foreign companies, including Singapore's Tee Yih Jia Food Manufacturing Pte Ltd Co and the French food giant Group Danone, were thought to be acquiring the famous Chinese company.

Jianlibao's heyday was in the early 1990s when the beverage was one of the best sellers along with Coca Cola and Pepsi.

Poor management, bad investment choices and fierce competition have dragged the company into heavy debt.

Statistics from the government of Sanshui, where Jianlibao is located, shows that the company lost over 40 percent in net profit last year.

Zhang Hai, new president of Jianlibao, has said that the new shareholders will spend 1 billion yuan (US$120 million) to rebuild Jianlibao's reputation.

In April, the company changed its single brand strategy by offering a new beverage called "Fifth Season" to target young people.

"We expect sales of the new beverage will be level with the Jianlibao-branded product next year," Jiang said.

(China Daily September 23, 2002)