Myanmar junta firm applies to end Kirin brewery deal: state media

[YANGON] A Myanmar military conglomerate has applied to dissolve the brewery it runs with Japanese beer giant Kirin, state media said, as its once-popular drink reels under a coup-inspired boycott.

Myanmar's economy has tanked since the military took power in February, sparking widespread protests, deadly unrest and international sanctions.

Lawyers for Myanma Economic Holdings Limited (MEHL) "applied to dissolve Myanmar Brewery Limited on Nov 19", state-backed newspaper Myanma Alin reported, without giving details on why the application had been made.

Kirin has a majority stake in Myanmar Brewery Limited in partnership with MEHL, a secretive military-controlled behemoth with tentacles in industries as diverse as beer, tobacco, transportation, textiles, tourism and banking.

Myanmar Brewery, whose beverages include its flagship and ubiquitous Myanmar Beer brand, boasted a market share of nearly 80 per cent, according to figures published by Kirin in 2018.

A court hearing for the application has been set for Dec 10, the Myanmar Alin report on Monday (Nov 22) said, but the news appeared to catch Kirin unawares.

Kirin said on Wednesday it objected to the plan by its partner in Myanmar to liquidate a brewery joint venture there.

Kirin said in February it was cutting ties with its military-linked partner in Myanmar after the army ousted the democratically elected government.

Even as they negotiated a wind-down of the venture, Kirin executives said they wanted to stay involved in the Myanmar market.

"MEHPCL has been uncooperative in the negotiations, effectively rejecting our proposals," Kirin said in a statement.

Kirin's Myanmar business generated 32.6 billion yen (S$387.3 million) in revenue in fiscal year 2019-2020 but it has been under scrutiny for some time over its relations with military-owned breweries.

Investors piled into Myanmar after the military relaxed its iron grip in 2011, paving the way for democratic reforms and economic liberalisation in the country of more than 50 million people.

They poured money into telecommunications, infrastructure, manufacturing and construction projects.

The coup upended the democratic interlude and earlier this year the World Bank forecast the economy will contract by up to 18 per cent.

AFP, REUTERS