Kirin Buys Majority Stake in Myanmar Brewery
By Kyaw Hsu Mon 20 August 2015
RANGOON — Japan’s Kirin Company has announced the purchase of a majority stake in the country’s most lucrative beer manufacturer, the day before a deadline set to finalize the withdrawal of the brewery’s previous foreign backer.
Kirin announced on Wednesday it had bought a 55 percent stake in Myanmar Brewery from Fraser & Neave, owned by Thai business magnate Charoen Sirivadhanabhakdi, and will operate the company in partnership with a subsidiary of the military-owned Union of Myanmar Economic Holdings Limited (UMEHL).
After relations soured following Charoen’s 2013 acquisition of Fraser & Neave, UMEHL sought to dissolve its partnership with the Singapore-based beverage giant. At the end of July, arbitrators in Singapore gave UMEHL until Aug. 20 to finalize a $560 million share purchase Fraser & Neave, the same amount paid by Kirin to acquire the majority stake.
“Myanmar is an exciting market with considerable prospects—high growth and increasing consumption have been forecasted following the country’s recent democratization, ongoing reforms and the progressive lifting of previous economic sanctions,” said a press statement released by Kirin on Wednesday.
“Kirin aims for further growth by leveraging its own expertise in technology, product development, and research and marketing.”
Myanmar Brewery claims that its products—which include Myanmar Beer, Andaman Gold and Myanmar Double Strong—currently have a domestic market share of over 80 percent, though the commencement of local production by foreign brewers Carlsberg and Heineken is likely to erode the brewery’s customer base in the coming months.
Myo Min Aung, vice chairman of Myanmar Retailers Association, told The Irrawaddy that Myanmar Brewery’s revenue forecasts would remain strong despite the new competition as a result of the company’s comprehensive distribution network.
“More than 80 percent of retail alcohol sellers have contracted with Myanmar Brewery to sell their products,” he said. “Other new beer brands will find it hard to compete with them as the taste of their product is accepted by both local and foreign consumers.”
Myo Min Aung added that he expected Myanmar Brewery to upgrade their facilities and incorporate new products as local competition increased.