McDonald's Co. (Japan) said Tuesday that it will launch seven espresso-based drinks under the McCafe brand and start serving some of them on November 21.

The drinks, including cafe latte, cappuccino and caramel latte, will be priced at between 190-300 yen ($2US.10-3.32), 20-30 per cent lower than comparable drinks served at cafe chains.

With the release of the new drinks, the McDonald's Holdings Co. (Japan) (2702) unit has decided to use the McCafe brand name for its coffee beverages. To promote the brand, it plans to offer free cafe latte samples and run other sales promotions.

McDonald's Japan aims to offer the drinks at 1,000 to 1,200 of its roughly 3,700 franchises nationwide by 2010.

Since introducing hot and iced regular coffee drinks in 2008, the company has achieved combined annual sales of 260 million cups.

The Japanese market for espresso-based drinks has been growing at an estimated 8 per cent annual pace, led by Starbucks Coffee Japan Ltd. (TSE:2712) and other cafe chains. McDonald's Japan appears to be looking to challenge them head-on .

"As long as we're doing it, we aim to be No. 1," chairman and president Eiko Harada told a news conference in Tokyo Tuesday.

(Nikkei)