Burma’s Soft Drink Makers Brace for Big Changes

Burma’s soft-drink makers are on edge as Coca-Cola announces plans to re-enter the local market after a six-decade absence. (Photo: Andrew Tapper)

The return of Cocoa-Cola to Burma after a six-decade absence has many in the local soft-drink industry  worried about their future, as they face off against one of the world’s most recognizable brand names in a battle for the hearts and minds of Burmese consumers.

The company announced earlier this month that it would remove Burma from the triumvirate of countries where it doesn’t do business, leaving only Cuba and North Korea on the dwindling list of places where Coke isn’t a household name.

The move, which follows the Obama administration’s decision in May to suspend US sanctions on Burma, is just the latest sign that the country is slowly losing its pariah status after decades of isolation.  But for domestic makers of carbonated beverages, it could be more than just the end of an era—it could be the beginning of the end of a local industry.

The fear is that Burmese consumers, whose first consideration is cost rather than brand loyalty, will switch to Coke the moment it becomes more affordable and more widely available, because it is already regarded as a superior product.

“Most Burmese people will start drinking Coke when the company starts doing business here,” said Sai Sam Tun, the chairman of the Loi Hein Company, a leading local soft-drink manufacturer.

Although Coke’s distinctive logo is already a familiar sight in some major cities, thanks to cross-border trade with Thailand, a single can costs at least 1,000 kyat (US $1.15)—a full day’s wages for many Burmese. This compares with prices as low as 100 kyat per bottle for local brands such as Happy Star and Sweety.

This price advantage could soon be erased, however, if Coke begins to produce inside the country.

“When they set up here officially, they will be able to sell for the same price or less than local drinks,” said Nyi Nyi, the marketing manager of the Happy Soft Drink Company, who added that there are rumors that Coco-Cola plans to invest more than $300 million in Burma.

To survive, most companies are now considering their options.

“There are three ways we can go: We can sell out to Coca-Cola, we can cooperate with them, or we can try to compete,” said Sai Sam Tun.

“When they come here, we will have to talk to them, because we don’t know what their plans are. In some countries, they form joint ventures; in others, they go for 100 percent ownership. We’ll have to see which they will do here,” he added.

In the past, Burmese soft-drink companies have benefited from the expertise of foreign manufacturers, albeit under somewhat unusual circumstances. When PepsiCo pulled out of Burma in 1997 in response to a US boycott, it left behind technicians and other skilled workers who later went on to join MGS, the maker of Crusher and Star Cola, which sell for a relatively costly 300 kyat ($0.35).

Generally, though, foreign companies are regarded as a threat, whether they are Western-based multinationals or Chinese makers of cheap, low-quality soft drinks that undercut local brands. What Burmese consumers crave, it seems, are affordable products that they can trust.

“Whenever I buy a soft drink at the supermarket, I choose Coke over local products like Star Cola, because even if a local company has ISO certification, the quality control and technique still aren’t as high as foreign products,” said Nay Linn, a 26-year-old economics graduate student.

But before Coca-Cola can return to Burma, it will have to reassure its customers in other parts of the world that the move won’t come at the cost of other standards that matter to consumers.

In a statement, the Atlanta-based company sought to put everyone’s minds at rest about the ethics of investing in a country known until very recently as a pariah state: “Coca-Cola’s planned entry into Burma, following the suspension of sanctions, will be governed by its well-established global standards for corporate ethics including strict adherence to its global human and workplace rights policy, supplier guiding principles, code of business conduct and anti-bribery policies.”

Lest the rush to cash in on what could prove to be a major new market leaves too bad a taste in the mouths of potential critics, the company has added an additional sweetener: plans to donate $3 million to support projects aimed at empowering women in the workplace.

16 Responses to Burma’s Soft Drink Makers Brace for Big Changes

  1. This is an Open Note to Coca-Cola, PLEASE do not do business with Loi Hein they are part of the JUNTA set-up. Work with some other companies who are ready to work in Transparent.

    Loi Hein a part of the JUNTA set-up just like Max Myanmar Group they are all in the JUNTA group.

    • Loi Hein is Wa, the drug dealers.

      Then again, they used to own the country and guess what, they still do so. They are now more powerful, not less, under this “Democracy” and “reform” by the soft-liners (ha-ha) and all that craps idiots have been crowing day and night about including Aung San Suu Kyi.

      Coca-Cola is a commercial company. They will do anything and everything that makes money so long as they can avoid US laws.

      In current Burma, hardly any major company/ important government personnel has no connection with drug trade, the biggest domestic exporting economic sector of the country- opium and ATS all the way to Australia, Europe and US. Funny no one mentions it again including the much enlightened foreign learning “Democrats”! Elephant in the room. A pink one.

  2. Fresh coconut water is far better than these drinks.Burmans don`t be fooled by western companies & medias.Taking Coke ,Pepsi does not mean developement.Developement is something else.

  3. Sometimes ago someone wrote about this news but links to that page have been gone. I searched and add it here again with some additions:

    Wow! How come and all of a sudden we are in need of coke – the delicious and irresistible drink that millions of Myanmar peoples will drink every time they feel hot in the tropical warmest country and throw away aluminum and plastic bottles into trash.

    So what we get in return for our hard earn (one of the lowest income in the world) salary are:

    – More health problems
    – More financial problems
    – More garbage and environment problems
    – More money has to be spent on importing health care facilities
    – More climate damage
    – other related cultural and mental problems will come with great speed

    With the increasing temperatures, peoples will drink even more coke. Following the coke success, pepsi and other similar drinks will follow in and the diversity of various damage will increase exponentially.

    The greed is boundless and so are the desires and instinct for the new desires. Already, some of the richest in our country are the one who produce alcoholic drinks by importing foreign fancy glass bottles, caps and labeling, and pouring that deadly liquids into the intestine of those mostly poor peoples around the country: you can see the advertisement of various alcoholic drinks in every city, town and villages. Imagine the equally boundless extent of troubles we have.

    And those who reap great profits from these community destroyer-businesses (coke, alcoholic, & others) by creating tons of troubles to millions of peoples for generations will do beautiful things such as (not not limited to) donations to temples, donation to schools, etc. and they will reap again great respect and honor from us! They gain double or triple profits and we lose all of us without even knowing what is happening.

    Why there not an investment in the sustainable development in orange, mango, apple, pipe apple… fruits farming and production of natural fruit juice? Why there no business in the field of producing the guide books for every one to learn about health, cleanliness, community green places, producing healthy food at home? Why there not any investment in the systematic methods of building construction, wood working, road building, efficient and cost saving methods in garbage system in the whole circle of production-consumption?

    Look at us compared to the world.
    1) We are ones of thinnest, smallest, most unhealthy peoples
    2) Out villages, towns and cities are dirtiest
    3) Our lands, hills, rivers, and mountains are lacking healthy jungle and wildlife
    4) Our income is one of the lowest
    5) Our system of working and management is one of the most inefficient
    6) Our natural resources are degrading and getting smaller with ever increasing rates
    7) Our cultures and traditions are in dangerous state

    Open your mind, wake up, lessen your greed and desire for unhealthy products and services. Learn every possible knowledge. Open to all possible ideas and ways of seeing things. Be smart, do not destroy your country and peoples just to make yourself rich. Treat every equally and fairly. Get rid of bias.

    Please all of us, and everyone, I want to ask – Please do not destroy a place and its peoples!! Please do not install more and more desires for the things that will eventually destroy our life and cultures and lands and our health. Be humane. Do not make worse the already hugely unbalanced flow of love, respect, trust, opportunities and knowledge.
    We need EDUCATION for all.

    • Dear Chit Ko Ko,

      Yes, you are right I agreed with with that we should look into our very own natural products to innovate a better product for the people of Myanmar and share the wealth thru the people of Burma.You are a very sensible person and truly hope that there should be more people like your goodself. I wish for you and your family and the people of Burma better years ahead and happiness.Keep up the good work strive for a better Myanmar. I wish you every success and good luck.

    • “Please do not destroy a place and its peoples!! Please do not install more and more desires for the things that will eventually destroy our life and cultures and lands and our health.”

      “Please do not destroy a place and its peoples!! Please do not install more and more desires for the things that will eventually destroy our life and cultures and lands and our health.”

      “Please do not destroy a place and its peoples!! Please do not install more and more desires for the things that will eventually destroy our life and cultures and lands and our health.”

      • Funny thing “desire”. More than HIV or religious fundamentalism or global warming, for the globe, the most destructive force. Desire.

        Current commercialism and consumerism is based on it. All slick, snazzy advertising and instillation of envy and desire!

        The housing boom was more dangerous because the same people living in the same house now being told worth several times from the last year value start to buy more expensive consumer products than last year, so on and so forth.

        Now 4mm Television with Super-Amoled screen. Galaxy S III. Project Glass, Space holiday. List is endless. Wasteful consumerism is the end of every thing decent in the world especially morality.

        Coke represents it as well as acts as an ambassador for it.

        Vote clean drinking water!!!

  4. $3 million dollars… is that all?

  5. Woooo!!

    I can’t believe that coke the drink of complete un-necessary but sure fire money sucker in such a place with so very hot climate will take away sweat-soaked money from the poorest of the poor peoples of the world!

    Well, that is a way the rich get richer. Besides creating the huge gap between poors and riches, this kind of products will create bigger garbage and larger and more complex health problems in the country where its citizens are already the least healthiest and ones of the smallest human beings of the planet.

    The education system in that country must be such a crumbling stage and or the management of the investment is like helping themself heading toward slavery the fastest short-cut.

  6. Sweetness is hard to refuse for many people as well the delight of the kids. In Myanmar a soft drink is considered a luxury drink and people are misled by the marketing campaigns to satisfy their thirst.

    The Health Ministry is not aware of how to educate on the consumption of soft drinks or its content such as sugar, hopefully food colour, carbon dioxide, and not to mention the preservatives added.

    Have we ever seen nutritious chart on a soft drink or any warning on the danger of your child obesity, teeth problem by consuming it regularly, NO!

    If people are aware of such health conscious by having a soft drink they would not need to welcome such industry.

    Yes, this can create lots of jobs for the nation but overall it is not a good product for the country in terms of health and the loss of water resources.

    I am not a soft drink fan obviously nor a lobbyist for the local drink maker. We have had enough problems to tackle with not properly approved local soft drinks from various factories with different brands.

    It is also sad to see all the misleading advertising on soft drinks on TV and the billboards!

    I know I cannot change the needs of people desire to quench themselves with soft drinks but I am happy that I can at least share my view on here.

    Smoking kills, a soft drinks would do the same sooner or later!

    Wishing Myanmar A Healthy country here!

  7. It is unhealthy to drink Coke,just look at those fat Generals,I believe they are strong supporters of Coke,for Burmese,refrain.

  8. Please kindly let me share a latest disappointing news that perhaps not many is aware of it…this is concerning the BIG HOOHAA about relax visa-on-arrival, a friend of mine from ASEAN country said that visa-on-arrival is only for ASEAN business travellers and NOT for tourist visa its back to the Burmese Embassy to apply for tourist visa NOT at Yangon International Airport, Visa-on-arrival. Sorry to say that this is another ALL-TALK-NO ACTION again on the Burmese Gov again, you make a BIG HOO-HAA and shout to the world that you relax the visa rules for ASEAN BUT this is not the case. SO DISAPPOINTING…I have said this before. What a shame!

  9. Apart from the undesirable BAD effect of the products themselves, Brand names like Coca-Cola, McDonald and KFC tend to “unite” the people, especially urban youth, as Hasan Md Abdur Rouf commented above as a trendy thing to drink and eat. These outlets necessarily and effectively act as Most persuasive ambassadors of “Modern Decadence” to inform and instruct the young and not-so young to do things to “Catch up with others” or simply to be in the crowd.

    The societies are reduced to being confined in Coke-McDonald- KFC defined world of latest Hollywood movie, latest Playstation game and latest actress and Royal scandals while drolling for the next “cool” one like 4mm Television with Super-AMOLED screen or Galaxy SIII for which people will work day and night in minimal wage for 18 hours a day. Society unravels. GREED and wasteful consumerism is how the minimal wage in the whole world can be kept lower and lower (current minimal wage for the worker is LESS than in 1980’s in real terms) effectively making these masses with greed as virtual slaves while they think they are so smart and FREE!

    For Burma it is a shame that no moral authority comes up NOW simply to say absolutely essential but simple things like “NO Greed” or at least “Less Greed” and more importantly “Keep Five Precepts” whatever religion one observes at a time when people are trying to ape the Chinese, Korean Soap stars and Thais as well as the “West” by “Drinks” and Morally decadent culture.

    When the monks preach not to contain greed but of their extensive experience with foreign travels and drink non-alcoholic wine, the country has no chance.

  10. coke is a better option, far better one than the ones that’s available to the burmese right now. think about it; right now, all the soft drinks available are probably made with some hazardous material, like milk in china, and all the profit goes to the generals’ asses kisser like zaw zaw, loi hein owner Sai, and the likes and the wages they pay to their employees is what i called suicidal wage. with coke arrival, at least the drink will be a little safer, workers will get more money and the profit will go to anyone who buys coke stocks, which is available to everybody. so all the people who’s commented about coke being unhealthy and all that, just one question: the soft drinks available now is burma of a better quality and healthier???????????? or do you work for Zaw 2?

  11. Myanmar Has Lot Of Good Agriculture Land Which Should Be Developed
    To Grow Crop And Fruit.
    These Fruits Which Are Surplus Should Be Made Into Fruit Juice Which
    Is More NOurishing And Healthy.
    Also It Helps The Farmers To Earn Some Cash And Slow Eradicate Proverty.

Leave a Reply

Your email address will not be published. Required fields are marked *

 characters available. Comments with external links in the body text will be deleted by moderators.