Plan Acquisition in Japan

Tesco PLC
27 April 2004


                    TESCO PLANS TO ACQUIRE JAPANESE BUSINESS

Tesco's Japanese subsidiary, C Two Network Co., Ltd. (C2) today announced plans
to acquire the neighbourhood supermarket business of Fre'c, a privately owned
Japanese company. Fre'c operates mainly in the Greater Tokyo area.

The transaction is being co-ordinated by the Industrial Revitalisation
Corporation of Japan (IRCJ), and is conditional upon successful restructuring of
Fre'c's debt with the IRCJ's support.

C2 has been appointed by the IRCJ to sponsor the rehabilitation of Fre'c. The
proposed transaction will take the form of a demerger of Fre'c's supermarket
business of 27 stores and related assets into C2. In consideration C2 will
assume net debt of approximately JPY 3.0 billion (GBP 16m). The process is
expected to complete in August 2004 and will be funded from C2's existing
financial resources.

The proposed transaction is consistent with C2's growth strategy in recent
years, which has been driven by a combination of organic growth and selective
acquisitions.

This is a small but strategic move. A successful deal would give C2 access to
stores that complement the store size and location of its existing chain.

Introducing C2's processed and packaged foods supply chain will deliver better
value for Fre'c's customers. At the same time, there will be opportunities for
C2 to learn from Fre'c's successful fresh food operation.

                                     -ENDS-


Notes to Editors:

About C Two-Network Co. Ltd

Tesco acquired C2 for £139m net of cash in July 2003. C2 has a long history of
distribution of processed foods to independent retailers. In 1994, it expanded
on this experience and know-how and entered the Japanese food retail sector. It
now controls 77 profitable stores mainly in the Tokyo metropolitan area. C2's
focus is on the retailing of packaged foods (grocery and refrigerated) through
discount convenience stores with tenant fresh food operators.

About Fre'c

Fre'c ('Fresh and Cost') is a regional privately owned Japanese company with
particular strength in fresh food. In the year ending March 2003 sales were JPY
28bn (£146m). Fre'c operates 27 neighbourhood supermarkets mainly in dense
residential locations.

About the Industrial Revitalisation Corporation of Japan (IRCJ)

The IRCJ is a Government affiliated body set up in mid-2003 to purchase
non-performing loans of viable but indebted companies.


Contacts:

Press      Jonathan Church   Tesco plc                   [phone]
           Angus Maitland    The Maitland Consultancy    [phone]
Analysts   Steven Butler     Tesco plc                   [phone]



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