Japanese brewer Kirin to exit Myanmar and sell stake in two ventures
Japan | Kirin Holdings will withdraw from its business in Myanmar and terminate its joint venture with a military-linked partner, it said on 14 February 2022.
Kirin has been in a dispute with local partner Myanma Economic Holdings Public Company Limited (MEHL) on how to dissolve their brewery venture following a military coup against the democratically elected government in 2021.
Kirin previously said it wanted to remain in the Myanmar market somehow. But after a year of negotiations, the two sides agreed on terminating the venture and Kirin’s exit from the country.
“We will resolve this issue by the end of June, no matter what it takes,” Kirin CEO Executive Yoshinori was quoted as saying by Reuters.
The exit will cost Kirin dearly
The withdrawal will result in an impairment loss of JPY 46.6 billion (USD 404 million) in the year ended in December 2021, Kirin said. The cumulative impairment loss for the Myanmar business was JPY 68 billion (USD 592 million), media say.
Kirin will now seek to sell its stakes in two business units in the country, Myanmar Brewery Ltd and Mandalay Brewery Ltd. Since 2015, Kirin has held 51 percent stakes in the two companies and MEHL the rest.
It is unclear whether Kirin can find a buyer, as it will avoid selling to companies related to the military.
Justice For Myanmar, an activist group that opposes the military junta, welcomed Kirin’s exit. “Millions have joined the boycott of Myanmar Beer, and this shows that collective action can disrupt the military cartel,” the group said in a statement.
Kirin results show Myanmar Brewery sales declined 39 percent in 2021 over 2020.
Kirin sells stake in Chinese soft drinks firm
Kirin has been struggling with its overseas acquisitions of brewers and soft-drink producers, that were in part spurred by a saturated market in Japan. Separately, Kirin also sold its China soft drinks joint venture to Plateau Consumer, a Chinese investment fund, for JPY 115 billion (USD 995 million), which covers its entire 40 percent stake in China Resources Kirin Beverages.
The joint venture, established in 2011, had been expanding its business in China, making bottled water and bottled tea, Kirin said.
