Eversheds comments on Tesco and CRE’s deal to create China’s largest food retailer

Stephen Kitts, Asia managing partner at Eversheds, has commented on news that Tesco and China Resources Enterprise (CRE) have reached a deal to create China’s largest food retailer.

He said: ‘Tesco has identified two issues: first, that you cannot ignore the rapidly growing domestic consumer market that is increasing in sophistication as personal disposable income rises; and second, that success in China is not guaranteed or easy to achieve and the best way forward is to work with an indigenous partner who is tuned into the ways of doing business in one of the most challenging international markets. Not surprisingly, the City has seen this as a sensible strategy and Tesco’s share price has moved upwards upon the announcement.’