China's leading cigarette company, Hill of the Red Pagoda (HRP), said it had reached agreement to make one of its brands in Germany. The Yunnan-based firm, with a domestic market share of about 7 per cent, said growing foreign competition had precipitated the move. "It is better to co-operate with the foreign companies than be eaten by them," a company official was reported as saying by South China Morning Post.
HRP has teamed up with Reemtsma, the largest German-owned tobacco company, to make an HRP brand called West, mostly for sale in Eastern Europe. The two companies are also considering developing a new brand to be made in Yunnan using Chinese tobacco.