SOURCE: China Food Services, Corp.

China Food Services, Corp.

May 23, 2011 09:10 ET

China Food Services, Corp. Update on Merger

BEIJING--(Marketwire - May 23, 2011) - China Food Services, Corp. (PINKSHEETS: GDHI) today announced that it is in final discussion with California Grapes International, Inc (CGI) to complete the recently announced merger.

The U.S. only accounts for about 6% of the global wine trade industry that is forecasted to consume 26.12 Billion Liters by 2015. As the 4th largest producer of wine in the world, this is an opportunity with tremendous growth potential. There have been many attempts to sell California wine internationally, but without the direct "Business to Consumer" connection to the story behind the wine, winery and winemaker, the success becomes dependent on the price of the wine and not the value or quality of the wine. The process of dealing with import regulations, time zone differences, language barriers, adequate customer feedback and the request to provide credit terms internationally all require more involvement that most wineries are prepared to handle.

This is where "CGI" comes in to provide the necessary resources and expertise to make international sales successful. The strategy for "CGI" is based on the simple philosophy of marketing, promotions and education. With a combination of "direct to venue," "traditional retail," and "distribution sales," "CGI" has a broad reach into any marketplace to provide the necessary education-based marketing and value-added sale strategy for the direct to consumers, restaurants and hotel venues.

Frank Yglesias, CEO of China Foods Services, Corp., commented, "I am looking forward to completing the potential merger and to work with California Grapes International. Their strategy aligns well with ours in achieving its business model for 2011. Upon completion of the merger the Company will be 100% in the California Wine business in China."

The terms of the proposed transaction have not been released at this time and there can be no assurances that a definitive agreement will be reached. Both companies expect to complete the agreement this quarter, subject to the approval of the respective Boards of Directors.

Safe Harbor Statement
Information in this press release may contain 'forward-looking statements.' Statements describing objectives or goals or the Company's future plans are also forward-looking statements and are subject to risks and uncertainties, including the financial performance of the Company and market valuations of its stock, which could cause actual results to differ materially from those anticipated. Forward-looking statements in this news release are made pursuant to the 'Safe Harbor' provisions of the United States Private Securities Litigation Reform Act of1995.

Contact Information

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    For more information, please contact:
    China Food Services, Corp.
    USA Office: +1-888-889-8185
    USA Fax: +1-888-263-4332
    China Office: +86-10-87764741
    China Fax: +86-10-87764742
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