Canadian Manufacturing

Japan’s Kirin to withdraw from beverage manufacturing in Myanmar, citing human rights issues

by Associated Press   

Exporting & Importing Financing Manufacturing Operations Regulation Risk & Compliance Sales & Marketing Supply Chain Alcohol & Cannabis Food & Beverage beverage manufacturing Economy infrastructure Manufacturing supply chain trade


Kirin announced more than a year ago that it was unhappy with a Feb. 1, 2021, military takeover that violated its corporate standards and human rights policy.

Japanese beverage giant Kirin Holdings said on Feb. 14 that it has decided to withdraw from its joint venture in Myanmar.

Kirin, owner of the San Miguel, Fat Tire and Lion brands, said its board made the decision to “urgently terminate” the partnership with Myanma Economic Holdings Plc, a military-affiliated company, after finding it would be difficult to quickly end the venture in the way Kirin wanted to.

The company announced more than a year ago that it was unhappy with a Feb. 1, 2021, military takeover that violated its corporate standards and human rights policy.

The military ousted the elected government of Aung San Suu Kyi triggering mass nonviolent protests nationwide. When the military and police responded with deadly force, armed resistance arose in the cities and the countryside in a fierce struggle for power.

Advertisement

But Kirin had been trying to keep its beer business in the country and get MEHL to sell its stake, saying it wanted to support its employees and help the country. Now, Kirin intends to sell its 51% stake, but not to MEHL, Kirin said.

The company said it hopes to finish its withdrawal by June. No names of potential buyers of its stake were disclosed.

Human rights activists urged Kirin to “divest responsibly” and avoid payments to the military administration and MEHL. Some opponents of the military had urged the Myanmar public to boycott products made by the venture, Myanmar Brewery.

Earlier, Kirin sought commercial arbitration in a dispute with MEHL over its plan to unwind the joint venture. MEHL had petitioned for liquidation of the venture, which Kirin said violated the joint venture agreement and was an “unjustified motion.” A court recently ruled against MEHL’s petition, citing a technicality.

Kirin said it was recording an impairment loss for 2021 on its business in Myanmar of 68 billion yen ($580 million).

It is one of the few Japanese companies that have signaled they will leave the country following last year’s coup. Japanese companies are active in manufacturing and real estate and helped build an industrial zone to the south of its largest city, Yangon.

Advertisement

Stories continue below