Carlsberg beat Heineken in opening a brewery
Carlsberg opened its first beer production plant in Myanmar, Asian media reported on 8 May 2015, thus leapfrogging Heineken, which announced its own venture around the same time as Carlsberg did.
The Myanmar Carlsberg brewery, which is a joint venture between Carlsberg and a Burmese company, has an annual capacity of 600,000 hl. It will produce the Carlsberg and Tuborg brands, as well as a new brand called Yoma. Carlsberg holds 51 percent of the joint venture under a 2013 agreement.
The USD 75 million plant is located in Bago, 80 km northeast of the commercial capital Yangon (also known as Rangoon). In 2006 the military government relocated the capital from Yangon to Naypyidaw.
The beer market in Myanmar is forecast to witness considerable growth. State- and military-owned enterprises have had a virtual monopoly in the sector for decades but the government decided to open it up to foreign brewers in 2013.
Although Myanmar drinkers still tend to favour locally distilled whisky, which is considerably cheaper than beer, figures from Euromonitor show that the legal beer market hit 1.72 million hl in 2013, with an annual growth of 5.5 percent since 2009. In dollar terms, beer sales amounted to USD 265 million in 2013, and have posted 14 percent annual growth between 2009 and 2013. Annual growth of 21 percent is expected between 2014 and 2018, when the market is forecast to reach USD 675 million.
Estimates as to how much beer Burmese consume on average per year range between 3 and 6 litres. This compares with 38 litres in Thailand and 32 litres beer in Vietnam.
What could spoil foreign brewers’ business plans are illegal imports of beer. The volume of beer that comes in from Thailand alone is said to be significant. Besides, illegal imports effectively set a ceiling on the price of locally produced beers. Already domestic beer sells for the same price as imported beer, Asian media reported last year. Most likely, illegal imports could pose a bigger challenge for foreign brewers and their joint ventures than the country's fractured distribution networks and its infrastructure shortcomings, both often cited as hurdles to doing business.
There is no news as yet when Heineken’s Burmese brewery will go on stream. In 2013 Heineken announced that it had entered into a joint venture with the privately-owned Alliance Brewery Company Ltd (ABC), a Burmese spirits producer, to build a USD 60 million brewery near Rangoon. Heineken, through its subsidiary Asia Pacific Breweries, will have a controlling 57 percent stake in the joint venture and will be responsible for overall management.
The international community began lifting its punitive sanctions on Myanmar after the military-backed government had made some progress on social and political reforms and pledged open elections this autumn.
