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 VANCOUVER, British Columbia, Dec. 15 /PRNewswire/ -- Vancouver- based pet food manufacturer, Bahn Foods Inc., through its Far East licensee, David Resources, has received the first license ever granted by Chinese government officials in Guangdong Province for the importation and sale of pet food and related products.
 Agreement was recently reached between David Resources and the Foreign Economic Relations & Trading Commission of Guangdong Province. The license not only covers the province but the entire country of China. To Bahn's knowledge, no other pet food company in the world has been granted such a license.
 There are two contracts. The first covers the licensing agreement, the second deals with the establishment of Bahn pet shops within China's Friendship Stores.
 -- The license is for an indefinite period with no termination date. This is extremely important as Bahn is able to view the Chinese market as a long-term development project. There are approximately 30 million pet dogs and 200 million pet cats in the country. The ownership of animals for pets is growing extremely quickly. In contrast in the United States, there are approximately 54 million pet dogs and 56 million pet cats;
 -- The license provides for the right to import and sell a complete line of pet products and is not restricted solely to foodstuffs. Bahn could expand its market to include products for not only dogs and cats but fish, birds, etc.;
 -- The license grants the right to import dogs and operate kennels. There is a large growing demand for pets in China with premium prices being paid for quality animals from reputable breeders; and
 -- The license grants the right to establish a chain of pet shops throughout China which can sell pets as well as pet products.
 Friendship Stores
 An additional contract has been secured with the Friendship Store chain. With up to 1,000 stores throughout China, it is currently the only large chain of stores throughout the country. The stores were originally established by China Travel Service to mainly provide souvenirs for tourists and to secure "hard" currency for the country but are now used extensively by the Chinese population.
 The stores have evolved in size and in their product lines to the point that some of the chain contains operations similar to large North American department stores. The stores are primarily located in areas where the local population has the highest per capita income. The contract provides for Bahn pet shops and kiosks to be established in the chain. This arrangement gives Bahn access to the only organized major consumer distribution system throughout China.
 -- Bahn will initially focus on those areas where pet ownership shows the greatest growth, which also corresponds to the strongest economic regions with highest incomes. These are Guangdong Province, Beijing, Shanghai, coastal centers and some inland industrial areas;
 -- David Resources will spend a minimum of $2 million (Cdn.) on advertising and promotion in 1993 of the Bahn products;
 -- A target has been set of 100 pet shops and kiosks to be established in the Friendship chain in 1993;
 -- Up to 30 "exclusive" Bahn pet stores (other than Friendship stores) will be operational in 1993;
 -- At least one kennel/clinic will be built in 1993;
 -- The system will be put in place to facilitate the importation of pets;
 -- By the summer of 1993, the company plans to import dry cat and canned dog and cat food into China. At the moment, Bahn has a full line of all natural dry dog food, of which the first shipments will arrive in China by February of next year. The dry cat food and canned dog and cat food will be new product lines; and
 -- Also in 1993, Bahn intends on holding a series of pet shows and competitions in key areas throughout China. A national competition, "The Bahn Challenge," is being planned for late next year and would include bringing breeders from North America for demonstrations and to provide educational programs.
 Projections of sales and growth are difficult as China is an untapped market which must be developed in regards to all aspects of the pet food market and the pet industry. However, China's rapid economic growth since the mid 1980s has led to strong and growing demand for Western products.
 While there will be significant effort required to educate the Chinese market, Bahn Foods is in a unique and advantageous position to enjoy massive growth over the next few years as a result of these developments.
 In conjunction with development of the Chinese market, the company is continuing to grow its market share in Hong Kong and is looking to expand to other Far Eastern countries in 1993.
 The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.
 -0- 12/15/92
 /CONTACT: Greg Pek, president of Bahn Foods, 604-439-3320; or Grant Howard of STRATCOM, 403-221-0915/

CO: Bahn Foods Inc. ST: Alberta IN: SU:

KJ -- LA034 -- 7451 12/15/92 17:53 EST
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Date:Dec 15, 1992

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