FOR IMMEDIATE RELEASE

Hong Kong, November 1 Disturbing results from a recent survey conducted by Watsons, Hong Kong's leading Personal Care Store, has led to an announcement by the chain today of a $120million stimulus package designed to enhance the Health and Well-Being of the citizens of Hong Kong.

The survey, conducted across Hong Kong, indicates both all-time high levels of stress and anxiety linked to recent global security developments, as well as reductions in spending on Health and Personal Care due to increasing pessimism about Hong Kong's economic outlook.

"We are confronted with a unique, and concerning situation for Health Care in Hong Kong." Said Andrew Brent, Regional Marketing Director of Watsons. "Not only do we see stress and anxiety at very high levels but due to the economic downturn, consumers are cutting back on products and services designed to enhance their physical and psychological Well-Being."

As Hong Kong's leading Personal Care retailer Watsons is responding to this unusual situation with an unprecedented stimulus package for Personal Care and Well-Being products and services.

The Key elements to this package are:

• A huge investment in lower prices in the Health and Personal Care products sold in its store. Watsons today announces a new Value regime with 2 parts to it
  
  --- A weekly package of 2,000 promotional offers under a "What's Hot?" banner and all protected by a new Unbeatable Price Guarantee. Teams of price checkers will monitor competitive prices to ensure Watsons "What's Hot?" prices are the lowest around. Should any consumers find a "What's Hot?" product sold cheaper elsewhere, Watsons will refund Double The Difference.
  
  --- A weekly selection of 50 "WOW!" That's Hot!" offers providing unbelievable value on a limited number of extra-special deals.

"These is an unprecedented investment in the Value of Personal Care Products in Hong Kong" said Brent. "We want to minimize the extent to which people feel price is a barrier to taking good care of themselves."

" We also hope that this initiative will underline Watsons position as providing the lowest Personal Care prices in Hong Kong. Because of the quality of our stores and the added value services we provide in areas like expert Pharmacy advice, some people may not realize what great value we offer. In fact, our tracking studies show that a basket of our products is consistently priced below the supermarkets, for example. This initiative will obviously serve to further improve this position."

• A programme of enhanced Healthcare service and advice in its stores via expansion in the number of stores with built-in Pharmacists, a major programme of training and service enhancement for its Health and Fitness Advisors (present in 90 of its 130 stores) and the launch of a new system of in-store information and advice to make it easier than ever for consumers to get the guidance they need.

• A programme to take Healthcare advice into the community via a 52-week "Ask Your Pharmacist" Roadshow traveling around Hong Kong. Piloted in 2001, this innovative community Healthcare programme has already had a very positive response from consumers needing easily - available advice on Healthcare matters.

"Together these investments will total around $120million over the next 6 months" said Gordon Reid, Managing Director of Watsons Hong Kong. "We are totally committed to doing whatever we can to enhance the Well-Being of Hong Kong's citizens at this difficult time - and we believe the programme we are announcing today goes a long way towards achieving that".

About Watson's

Established in 1828, Watson's Your Personal Store operates 520 stores in Asia Pacific. Building on its long-standing reputation for quality and innovation, plus a high degree of consumer confidence, Watson's caters to a variety of lifestyles with an unrivalled diversity of products.

In Hong Kong, Watson's has won a number of customer service awards and operates 130 stores with over 1,600 employees. Over 30 of its Watson's stores have licensed pharmaceutical counters which is the largest chain in town.