Carlsberg re-enters Southeast Asia’s fast-growing beer market

After Carlsberg began posting job openings for Myanmar nationals in mid-summer on its website, speculation was rife that Carlsberg was seeking to return to Myanmar following the easing of international sanctions which had forced the brewer out of the country in the mid-1990s.

On 1 February 2013 Carlsberg announced it has formed a joint venture in Myanmar with privately-owned Myanmar Golden Star Breweries (MGS) to brew and market Carlsberg beers in the country. Carlsberg will own 51 percent in the new joint venture.

MGS, which is controlled by local tycoon Thein Tun and produces Myanmar's leading cola brand Star Cola, is well known to Carlsberg. It was Carlsberg's original partner in Myanmar before political circumstances made Carlsberg leave the country. Previously, Carlsberg's beers were only imported into the country and sold there.

MGS and Carlsberg now plan to build a 1 million hl new brewery, which is supposed to be fully operational in 2014. Currently, beer production in Myanmar is estimated at 1 million hl (2011) according to the Barth Report, while total beer consumption in the country of perhaps 54 million people is around 3.5 million hl, says Carlsberg. Illegally imported soft drinks and beers have been streaming across the country’s porous borders for years.

The joint venture will invest at least USD 50 million in the first couple of years, it was reported. Carlsberg beer will be marketed as a premium product, while two to three other beers will be developed to compete with local brands such as Myanmar Beer and Mandalay Beer.

According to media reports, Carlsberg thinks the investment carries some risks, but it feels the political situation is stabilising and is confident it can bring its own ethical practices along with the investment.