* Thai billionaire teams up with Carlyle for ParkNShop bid

* Australia's Woolworths also bidding for ParkNShop

* CRE took Ng Fung Hong private in 2001 for $662 mln

(Recasts with source confirmation, adds details on ParkNShop bidders)

By Denny Thomas and Stephen Aldred

HONG KONG, Oct 8 (Reuters) - China Resources Enterprise Ltd

0291.HK is set to launch a strategic review of its Hong Kong meat distribution unit, a person familiar with the matter said, as it readies funds to bid for tycoon Li Ka-shing's ParkNShop supermarket business.

Li's Hutchison Whampao Ltd 0013.HK has put Hong Kong's dominant supermarket business up for sale, asking for $3-4 billion. The operator of China's second-largest supermarket chain has said it is interested in ParkNShop and discussed selling non-core units to fund future acquisitions without mentioning specific assets.

State-backed CRE has long been seen as one of the frontrunners in the auction and a successful bid would give it control of more than half of Hong Kong's $6.6 billion supermarket industry as well as a brand name considered more trustworthy than mainland China brands.

The list of suitors for ParkNShop include Thailand's CP Group, controlled by billionaire Dhanin Chearavanont, which has teamed up with Carlyle Group CG.O , people familiar with the process have told Reuters.

Australia's biggest supermarket operator Woolworths Ltd

WOW.AX and Japan's Aeon Co Ltd 8267.T have also expressed interest, sources have previously said.

There is, however, still a significant gap between the seller's expectations and what suitors are willing to offer, people familiar with the matter said. The CP Group-Carlyle Group consortium has made the highest offer, one person said.

The people declined to be identified as the discussions are confidential.

CRE has yet to decide whether to sell beef supplier Ng Fung Hong, one person said, which it took private in 2000 valuing the company at HK$5.13 billion ($662 million).

Bloomberg first reported CRE's review of its meat unit on Monday.

CRE, CP Group and Carlyle declined to comment.

The Chinese supermarket chain has been expanding in food and other retail operations. In beer, CRE has a joint venture with SABMiller Plc SAB.L and in beverages, it has tied up with Japan's Kirin Holdings Ltd 2503.T . It also recently formed a joint venture with British retailer Tesco Plc TSCO.L .

ID:nL4N0HS076 . ($1 = 7.7544 Hong Kong dollars)

(Additional reporting by Donny Kwok in Hong Kong and Saeed Azhar in Singapore; Editing by Anne Marie Roantree and Edwina Gibbs)

((donny.kwok@thomsonreuters.com)(+852 2843 6470)(Reuters Messaging: donny.kwok.reuters.com@reuters.net))

Keywords: CHINARESOURCES NGFUNGHONG/