10:07     SAN MIGUEL HK<00236> - Announcement (4)                             

                                                                              
    The commission payable by the Group to the SMC Group in respect           
    of the sale of packaged beer invoiced directly by the Group               
    directly to independent third party customers in certain                  
    countries (other than Hong Kong, Macau and/or the PRC) which              
    require direct invoicing from the country of origin shall be              
    determined by reference to the profit margin which would have             
    been made by the SMC Group had such packaged beer been sold               
    by the Group to the SMC Group and then on-sold by the SMC Group           
    to such independent third party customers. The Group will also            
    have regard to the historic levels of commissions paid to the             
    SMC Group in respect of comparable sales of packaged beer when            
    agreeing the levels of commissions to be paid to the SMC Group            
    pursuant to the Agreement. The Group will only pay such                   
    commission to the SMC Group in respect of such sales that the             
    Group receives payment in respect thereof from the customers.             
    Furthermore, the SMC Group shall indemnify the Group in                   
    respect of any non-payment by such independent third party                
    customers to the extent of the variable production and                    
    variable distribution costs incurred by the Group in respect              
    of the relevant beer.                                                     
                                                                              
    REASONS FOR THE CONTINUING CONNECTED TRANSACTIONS                         
    Purchases                                                                 
    The Group needs to source cans, bottles, crown seals and crates           
    for use in the packaging and distribution of its beer products.           
    The SMC Group has established itself as a competitively priced            
    and dependable supplier of cans, bottles, crown seals and                 
    crates to the Group which meet the Group's stringent quality              
    requirements and delivery schedules.                                      
                                                                              
    The Group also purchases beer products from the SMC Group for             
    sale to the Group's customers in Hong Kong and Macau to                   
    complement the range of beer products sold by the Group.                  
                                                                              
    Sales                                                                     
    The Group does not have an international sales force outside              
    of Hong Kong, Macau and the PRC. The Group is able to reach               
    customers in these export markets through the SMC Group which             
    markets and sells such products to customers through its                  
    international sales channels. In respect of such sales of beer            
    invoiced by the Group to the SMC Group for sale to export                 
    markets through the SMC Group, the Group is able to avoid                 
    taking exchange rate risk and counterparty risk with the                  
    ultimate customers in the relevant export markets. Customers              
    in certain export markets require direct invoicing from the               
    country of origin and so the Group invoices such customers                
    direct and pays commission to the SMC Group in respect of such            
    sales. As described above under the section headed "Pricing",             
    the SMC Group indemnifies the Group to the extent of the                  
    Group's variable production costs and variable distribution               
    costs in respect of any non-payment by the customers in the               
    export markets which are invoiced directly by the Group.                  
    Furthermore, certain of the beer products produced by the                 
    Group are San Miguel beer brands. The Group is licensed by                
    the SMC Group to sell San Miguel beer brands in Hong Kong,                
    Macau and Guangdong and Hainan provinces in the PRC. The Group            
    does not hold any rights to sell San Miguel beer brands                   
    anywhere else in the world. Those rights are held by the SMC              
    Group which owns the San Miguel beer brands and trademarks.               
    Accordingly, if the Group wishes to sell San Miguel beer brands           
    outside its defined territories, it must do so with the                   
    cooperation and approval of the SMC Group.                                
                                                                              
    GENERAL                                                                   
    SMC controls approximately 65.78% of the issued share capital             
    of the Company. SMC and its associates are therefore connected            
    persons of the Company for the purposes of the Revised Listing            
    Rules. The Continuing Connected Transactions under the                    
    Agreement constitute non-exempt continuing connected                      
    transactions under the Revised Listing Rules and are subject              
    to the disclosure and reporting requirements under Rules                  
    14A.37 to 14A.39 and 14A.45 to 14A.47 and are subject to the              
    approval of the Independent Shareholders under Rule 14A.35                
    of the Revised Listing Rules.