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Wine & Spirits

Japan’s Kirin to Withdraw from Its Myanmar Brewery Venture

February 15, 2022

BANGKOK — Japanese beverage giant Kirin Holdings decided to withdraw from its joint venture in Myanmar after deciding that staying was not benefiting its workers.

Kirin, owner of the San Miguel, Fat Tire and Lion brands, said Monday its board made the decision to “urgently terminate” the partnership with Myanma Economic Holdings Plc, a military-affiliated company.

The company announced more than a year ago that it was unhappy with a Feb. 1, 2021, military takeover that violated its corporate standards and human rights policy. It had tried to keep its business and convince MEHL to sell its stake.

But more than a year later, Kirin concluded that it would be difficult to quickly end the venture in the way it wanted to.

The military’s ouster of the elected government of Aung San Suu Kyi triggered mass nonviolent protests nationwide. When the military and police responded with deadly force, armed resistance arose in the cities and the countryside in a fierce struggle for power.

Kirin intends to sell its 51% stake, but not to MEHL, company officials said. Talks were underway and the company said it hopes to finish its withdrawal by June. No names of potential buyers of its stake were disclosed.

Human rights activists urged Kirin to “divest responsibly” and avoid payments to the military administration and MEHL. Some opponents of the military had urged the Myanmar public to boycott products made by the venture, Myanmar Brewery.

The company is also withdrawing from Mandalay Brewery.

Earlier, Kirin sought commercial arbitration in a dispute with MEHL over its plan to unwind the joint venture. MEHL had petitioned for liquidation of the venture, which Kirin said violated the joint venture agreement and was an “unjustified motion.” A court recently ruled against MEHL’s petition, citing a technicality.

Myanmar Brewery and MEHL did not respond to requests for comment.

Myanmar Brewery, founded in 1995, produces beers under the Myanmar, Kirin Ichiban, Andaman Gold and Black Shield brand names. It was unclear if the brewery would continue to make Kirin Ichiban after the venture ends.

Kirin said it was recording an impairment loss for 2021 on its business in Myanmar of 68 billion yen ($580 million). The company’s share price jumped 4% on Tuesday.

It is one of the few Japanese companies that have signaled they will leave the country following last year’s coup. Japanese companies are active in manufacturing, retailing, finance and real estate and helped build an industrial zone to the south of its largest city, Yangon.

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