Japanese brewer Kirin to withdraw from Myanmar

Japanese beer giant Kirin said on Monday that it is planning to pull out of Myanmar once it has terminated its partnership with a military-owned conglomerate.

The company, which has been at legal loggerheads with its joint-venture partner, the Myanma Economic Holdings Limited (MEHL), since late November, had previously said it would remain in the country after ending the venture.

The decision comes more than two months after the two companies went to court over the terms under which they would part ways.

Days after Kirin threatened to take legal action to end the partnership, MEHL filed a petition to dissolve their joint-venture agreement.

Kirin hit out at that move, saying that it was an attempt by MEHL to “to take control of the liquidation process.”

Last month, a Yangon court rejected MEHL’s request.    

Kirin announced its plans to terminate its partnership with MEHL soon after last year’s February 1 military coup, saying it was “deeply concerned by the recent actions of the military.”

In a statement released on Monday, the company said it has started discussions with MEHL to complete its exit from the joint venture and the Myanmar market.

“Kirin Holdings has committed to end the matter by the end of June,” said the statement.

The withdrawal will result in an impairment loss of 46.6b yen ($402m) in the year that ended in December, it added.

The joint-venture agreement gave Kirin a 51% stake in Myanmar Brewery, the country’s leading beer maker, while MEHL held the remaining 49%. Together, the companies, which also jointly owned Mandalay Brewery, once produced about 80% of the beer sold in Myanmar.

According to a company spokesperson cited by Reuters, Kirin will seek to sell the two units of its investment in Myanmar after the joint-venture termination.

News of Kirin’s exit was welcomed by activist group Justice For Myanmar, which urged a responsible divestment with no negative human rights impacts.

“Kirin’s withdrawal should serve as a warning to all other businesses about maintaining ties with the terrorist military junta and its conglomerates. Business with terrorists does not pay,” said the group’s spokesperson Yadanar Maung.

In the wake of the coup, people across the country have boycotted products produced by military-owned companies, including Myanmar Beer, as part of an effort to cut off the junta’s sources of funding. 

Kirin’s financial results show Myanmar Brewery sales declined 39.3% in 2021 from the previous year.

“Millions have joined the boycott of Myanmar Beer, and this shows that collective action can disrupt the military cartel,” said Yadanar Maung. 

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