China Peregrine Announces Reorientation of Business Structure.

Business Editors

NORTH PALM BEACH, Fla.--(BUSINESS WIRE)--Jan. 14, 2000

China Peregrine Food Corp. (OTCBB:CHPF) today announced a radical reorientation of its business structure that will enable the Company to maximize its resources in the capture of future growth. Underlying this strategic change is recognition of the importance of configuring an enhanced distribution system in order to bring an expanding array of premium food products to China's burgeoning consumer economy.

Accordingly, as a first step in this process, China Peregrine is terminating its involvement in its 70%-owned milk production joint-venture in Shanghai, and will move distribution of Looney Tunes(TM) flavored premium milk products forward via a licensing agreement with Shanghai Best Milk Products Co., Ltd., known in Chinese as Quan Jia (QJ), the second largest dairy in that metropolitan area. Under an agreement in principle reached by the parties, QJ will introduce China Peregrine's Looney Tunes(TM) flavored and white milks into the 1600 supermarkets and food stores that it currently serves in Shanghai and surrounding area, during the weeks immediately ahead. Under its Master License with Warner Bros., the Company will supply QJ with flavor ingredient sourcing, packaging designs for each of its four flavored milks and white milk, and support for the Looney Tunes(TM) brand with marketing and advertising programs. China Peregrine also will provide a modicum of working capital for the stocking of Looney Tunes(TM) inventory.

Based on favorable results of the testing of its Looney Tunes(TM) brands in the Shanghai market in the fall of 1999, China Peregrine subsequently determined that there is a more sizable and growing market for highly nutritional flavored milks than could be practically accommodated by its original joint venture. The agreement with QJ will accordingly swiftly expand China Peregrine's reach in Shanghai in order to more quickly satisfy demand for its premium milk drinks, which now include: orange (Tweety), chocolate (Taz), banana (Daffy), and vanilla (Sylvester). A fifth product also will be introduced under the QJ arrangement--an enhanced white milk, marketed with the logo of none other than the venerable Bugs Bunny himself!

Longer term, China Peregrine envisions that it will enter into similar strategic relationships with efficient dairies located in a number of other large metropolises of the Peoples' Republic of China. These arrangements will permit maximum diversification of geographical reach, while allowing the Company to leverage its resources into the development of new products, rather than being absorbed by the capital-intensive production process in Shanghai, which had resulted in accumulated losses in excess of US $5 million. Over time, China Peregrine intends to add other flavors to its Looney Tunes(TM) premium milk fold, as well as to introduce snack foods, gourmet products, and other such high-margin items that can be easily accommodated by its developing distribution system. With Chinese consumers currently spending over 40% of their growing incomes on food, and with the Chinese diet showing more of the trappings of the Western economies each year, China Peregrine expects to capitalize on the demand for premium food products created by the improving quality of Chinese life.

In addition, this business reorientation will allow China Peregrine to refocus its efforts with its other Chinese joint venture, Hangzhou Meilijian Dairy (MJV), which accounted for approximately 90% of the Company's reported sales in 1999. A significant part of that effort going forward will be the introduction of Looney Tunes(TM) flavored milks by MJV in the Hangzhou metropolitan area during the first quarter of this year.

For more information, visit our Web site: www.chinaperegrine.com.

Looney Tunes(TM) a , characters, names and all related indicia are trademarks of Warner Bros. (C) 1999, 2000

Safe Harbor Under the Private Litigation Reform Act of 1995: The statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future financial results, regulatory approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties as may be detailed in the Company's filings with the Securities and Exchange Commission.