Whitbread's first outlet in China began operations in Shanghai this month. Another outlet is on the way in the Bailian Zhonghuan Commerce Plaza of Shanghai's Putuo District.

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The company signed a joint-venture agreement with Chinese partner Yueda Group in June to launch the Costa brand on the mainland.

More than 300 Costa stores are expected to open throughout China in the next few years under the joint arrangement.

According to media reports, the coffee chain will hold 51 percent of the joint venture with US$4.2 million registered capital. The two companies will open 20 outlets across China by the end of 2006.

Coffee served in the Chinese stores will be supplied from Costa's production base in central London. The stores will also have the traditional Costa food menu.

 

The company sees the expansion into China as a stepping stone to becoming a global coffee brand.

Founded by Italian brothers Sergio and Bruno Costa in 1971, Costa already trades in 14 countries including India, Ireland and a number of nations in the Middle East.

Starbucks Corp, the world's biggest coffee-shop chain that has a strong presence in China, said it welcomes any competition.

"We are accelerating our development in Beijing and Shanghai, as well as in the west part of China," said Eden Woon, vice president of Starbucks China.

"We just opened an outlet in Xi'an last month."

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