10:06     SAN MIGUEL HK<00236> - Announcement (3)                             

                                                                              
    Payment of commission by the Group to the SMC Group in respect            
    of sales of packaged beer by the Group directly to customers              
    in certain countries (other than Hong Kong, Macau and the PRC)            
    1,100   1,300   1,600                                                     
                                                                              
    The proposed Caps were determined by reference to a number                
    of factors including historical transaction amounts, the                  
    expected growth in demand for the Group's beer products, the              
    expected growth in demand for the SMC Group's beer products               
    which are distributed by the Group, the Group's replacement               
    programme for its crates and the Company's understanding that             
    due to the SMC Group's production capacity constraints, the               
    SMC Group should have increased demand for the Group's                    
    packaged beer products for export markets.                                
                                                                              
    The Directors (excluding the independent non-executive                    
    Directors who will express their view after receiving advice              
    from the independent financial adviser) are of the opinion                
    that the proposed Caps are fair and reasonable and are in the             
    interest of the Company and Shareholders as a whole.                      
                                                                              
    Term                                                                      
    The period commencing on 1 January 2005 and ending on 31                  
    December 2007. In the event that the Continuing Connected                 
    Transactions are not approved by the Independent Shareholders,            
    the Company shall have the right to terminate the Agreement.              
                                                                              
    Pricing                                                                   
    The Board confirms that the pricing policy of the Company in              
    respect of the Continuing Connected Transactions is on an                 
    arm's length basis and is consistent with the Group's historic            
    pricing policy in respect of the past transactions between                
    the Group and the SMC Group (which were for the majority of               
    the Continuing Connected Transactions the subject of the                  
    conditional waiver previously granted to the Company by the               
    Stock Exchange) and that such pricing policy will remain                  
    unchanged and continue to be on an arm's length basis.                    
                                                                              
    With respect to the sourcing of packaging materials from the              
    SMC Group, the relevant members of the Group shall negotiate              
    supply terms with the SMC Group on an annual basis with                   
    reference to the prices and credit terms available from                   
    independent third party suppliers able to meet the Group's                
    stringent quality requirements and delivery schedules and if              
    no such comparable reference prices/credit terms are                      
    available, the prices/credit terms shall be determined by                 
    agreement between the parties based upon reasonable                       
    commercial principles.                                                    
                                                                              
    The prices payable by and the credit terms offered to the Group           
    for the packaged beer purchased from the SMC Group shall be               
    determined by reference to the prices paid by and the credit              
    terms offered to the Group in respect of other beers imported             
    into Hong Kong, Macau and/or the PRC by the Group from                    
    suppliers which are independent third parties and if no such              
    comparable reference prices/credit terms are available, the               
    prices/credit terms shall be determined by agreement between              
    the parties based upon reasonable commercial principles.                  
                                                                              
    The prices receivable and credit terms offered by the Group               
    for the packaged beer sold to the SMC Group shall be                      
    established by reference to the prices and credit terms                   
    offered by the SMC Group to ultimate customers, which are                 
    independent third parties, in export markets in countries                 
    other than Hong Kong, Macau, the PRC and the Philippines for              
    similar packaged beer products and if no such comparable                  
    reference prices/credit terms are available, the                          
    prices/credit terms shall be determined by agreement between              
    the parties based upon reasonable commercial principles.                  
    Typically the price received by the Group will be the price               
    at which the relevant packaged beer is on-sold by the SMC Group           
    to ultimate customers which are independent third parties in              
    the relevant export market less an agreed margin for the SMC              
    Group.