Japanese brewer Kirin have announced that they will end their joint venture partnership of Myanmar Brewery with Myanma Economic Holdings Public Company Limited.
Following the recent coup in the Southeast Asian nation Kirin feels it can no longer continue doing business with MEHL due to their reported links with the Myanmar military.
In a recent press release the Japanese brewer announced “Given the current circumstances, we have no option but to terminate our current joint-venture partnership with Myanma Economic Holdings Public Company Limited, which provides the service of welfare fund management for the military. We will be taking steps as a matter of urgency to put this termination into effect.”
This decision follows an inconclusive internal investigation into the use of company proceeds by MEHL. A 2020 Amnesty International investigation had uncovered clear links between MEHL and the military junta.
At a news conference to announce the news Kirin President Yoshinori Isozaki added “The military actions are completely incompatible with our business standards and human rights policy. There is no choice but to dissolve with our joint venture partner.”
Isozaki did add, however, that Kirin Holdings was not intending to withdraw from Myanmar “We are not thinking of withdrawing from Myanmar,” he said. “We are determined to continue contributing to the country.”
The Japanese brewer controls around 80% of the national beer market after their investment in Myanmar Brewery in 2015 and had previously announced that it expects its Myanmar business to produce 16 billion yen in operating profit for 2021, up 15.5% from 2020.
The purchase of the brewery, along with Mandalay Brewery, are part of it’s aggressive overseas expansion following a persistent drop in beer sales volumes in their domestic market.
Kirin intends to look for a private venture partner to replace MEHL, however it is unclear whether MEHL will accept the termination of the partnership or if a new partner can be found to invest in Myanmar with the ongoing political crisis.
Kirin’s controlling stake in Myanmar Brewery is currently valued at US$1.7 billion.