Facing boycotts, Myanmar junta-run company boosted production of lesser-known Red & Blue cigarettes

The Myanmar military-owned megacorporation Myanma Economic Holdings Limited (MEHL) has dramatically increased the production of one of its cigarette brands since 2022 in a possible bid to dodge boycotts. Few consumers boycott the Red & Blue cigarette brand as compared with other military-owned brands because it is not widely known that MEHL has a role in making them. Myanmar Now’s investigations found that MEHL was party to a cigarette-producing joint venture along with the Yangon-based company Golden Hill International, Ltd. since before the 2021 military coup. As of 2020, the date of leaked business registry records shown to Myanmar Now, the joint venture operated under the name Myawaddy and Golden Hill International Ltd. The quantity of Red & Blue cigarettes produced has increased fifteenfold since 2022, after consumers and activists opposed to the coup organised boycotts of the two better-known military-owned cigarette brands Red Ruby and Premium Gold. A former employee of Myawaddy and Golden Hill International spoke with Myanmar Now on condition of anonymity. She said the monthly production rate used to be around 1,000 cartons but that it increased to 15,000 cartons in 2022. “Employees could even take a nap during production time back in the old days, to be honest. But after 2022, production went up by a lot,” said the source. She added that the reasons for the change included the public boycott against other junta-owned cigarette brands such as Red Ruby and Premium Gold, the decision to exit Myanmar by British American Tobacco (BAT)—the maker of London and Lucky Strike cigarettes in the country—as well as the public’s ignorance of Red & Blue’s ownership. “This factory is working with MEHL and paying them licensing fees. No one smokes Red Ruby anymore, so they even transferred staff from Red Ruby to Red & Blue,” the company insider said. She added that the factory could only operate profitably if it sold more than 3,000 cartons of cigarettes a month, and that Golden Hill International also increased its profits by working with MEHL. Moreover, cigarettes were a lucrative source of revenue for the military regime, which collects excise taxes on cigarettes in addition to profiting from producing them, the employee noted. Thanks to its association with MEHL, she said, Golden Hill International was permitted to import raw materials at a time when most businesses were subject to severe restrictions on purchasing imports and a high risk of losing their import licences—part of a junta policy intended to slow the depletion of Myanmar’s currency reserves. The cigarettes, distributed by a company named Sales Express, sold for 1,800 kyat (US $0.66) a pack, she said. According to leaked investment records, Golden Hill International owns a 60-percent stake in the Red & Blue cigarette factory—located on an eight-acre compound in Hlaing Township, Yangon—while Myawaddy Trading Limited, a subsidiary of MEHL, owns 40 percent. MEHL and Golden Hill International invested 12 billion kyat in the business, according to the records, and received authorisation to form a joint venture in early 2011, while Myanmar’s former military dictator Than Shwe was still in power. 60 percent of shares in Golden Hill International belong to a man named Nyi Nyi Kyaw, who may be related by marriage to Maung Weik, a businessman and well-known crony of the military. Maung Weik was briefly jailed by the military regime on charges of bribing pro-democracy leader Aung San Suu Kyi, but later allegedly made a large donation for the creation of a Buddha statue commissioned by junta chief Sen.-Gen. Min Aung Hlaing when he was released. MEHL received 30,000,000 kyat per month in rent for the factory compound as well as at least two percent of profits from cigarette sales, according to Myanmar Now’s sources inside the company. According to the terms of the joint venture, the allocation of profits from the produced cigarettes should be based on the ratio of share ownership, but Myanmar Now was unable to confirm if the parties observed those terms in practice. Myanmar Now reached Myawaddy and Golden Hill International Limited by phone, but the staff who answered only said that they would return our calls at a later time. After BAT’s departure from Myanmar after the coup, there are three remaining large cigarette manufacturers in the country: Virginia Tobacco, which has also partnered with MEHL; the Myanmar Japan Tobacco Company, which produces Mevius, Winston, and Camel brand cigarettes; and Golden Hill International. The manufacturer of Myanmar Beer, the most widely boycotted military-owned beer brand after the coup, introduced a new brand in early April of this year called Keen, also likely in response to the boycotts. Boycotts against military-owned products show little sign of abating throughout the country. The transport, distribution, and sale of military-branded products is effectively banned in areas controlled by anti-junta resistance and ethnic armed groups.

Facing boycotts, Myanmar junta-run company boosted production of lesser-known Red & Blue cigarettes

Manufactured by the junta-run conglomerate MEHL, Red & Blue cigarettes are less commonly boycotted than other brands because fewer consumers know about their connection to the military

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