Japan’s Kirin Brewery Cancels Joint Venture with Tatmadaw After Myanmar Coup

By Author: Kalina Valqurey
6 0

Rappler reported that Japan’s Kirin Brewery has abruptly ended a controlling stake in one of its few growth markets, joint-ventures Myanmar Brewery and Mandalay Brewery, which are controlled on the Myanmar side under MEHL Holdings — a Myanmar venture tied to the Tatmadaw. 

Kirin stated in a news release on Feb. 5 that the beverage company “is deeply concerned by the recent actions of the military in Myanmar, which are against our standards and Human Rights Policy… Given the current circumstances, we have no option but to terminate our current joint-venture partnership.”

Kirin’s stake was worth between $1.4 billion and $1.7 billion, but would have been sold at a discount due to “material reputational risk,” according to the Wall Street-oriented research firm Bernstein Research. 

A Kirin Ichiban beer truck. (Image: Johnny SilverCloud on Flickr)

The partnership with Myanmar Brewery began in 2015, and while it accompanied a rush of other Japan-sourced investment into the country after globalist bloc World Economic Forum Member Aung San Suu Kyi’s party was placed into power, it was unique in that MEHL was still sanctioned by the U.S. for ties to the Myanmar military. Mandalay Brewery was added in 2017 after the success of its predecessor. 

However, despite experiencing growth in Myanmar, Kirin had already been under pressure to leave amid accusations of human rights abuses against the Rohingya. A UN fact-finding report in 2019 specifically called out Kirin, together with others, for investment in the MEHL companies. A Kirin audit in January to determine if the company’s money had been routed to the military was “inconclusive” and an update was promised in April. However, the Myanmar military’s recent actions to oust the National League for Democracy (NLD) party proved to be the final straw. 

In January 2016, Kirin was already ‘in’ as the slum area was cleared next to a military-owned beer factory. Residents had been given a one-day notice to leave their homes voluntarily. It is believed, from the photograph above that shows the children’s temporary structure crafted in part from a Myanmar Beer advert, that this was a MEHL-owned factory. The children take shelter in a temporary area during the demolition of their homes in a slum on the outskirts of Yangon on Jan. 26, 2016. Hundreds of Myanmar families were left destitute on Jan. 26 after government workers used mechanical diggers to flatten swathes of Yangon slum housing one week before Aung San Suu Kyi’s National League for Democracy party came to office. Residents shouted and wept as they scrambled to save their meager possessions as diggers crushed through the bamboo, corrugated iron, and concrete structures. (Image: YE AUNG THU / AFP via Getty Images)

According to “pressure group” Burma UK Campaign’s Director Mark Farmaner: “Kirin are the first major company since the coup to announce they will stop doing business with the military.” Boycotts of products are occurring, but the financial impact is not yet known. While it accounted for less than 5 percent of Kirin’s sales, the Myanmar businesses provided a rare growth market in Kirin’s global holdings. 

Public relations expert Bob Pickard, who worked in Japan for many years, has observed that swift apologies are especially important in Asian cultures, an aspect of cultural communication that he considers to be a strength. Regarding the Myanmar situation and Japanese business interests, Pickard suggested: “‘Business as usual’ poses an acute risk of public relations disaster for any Japanese companies that are slow to condemn what has happened today.” 

Pickard also said: “Japanese companies invested in Myanmar and especially those with military connections now need to be agile in articulating what these events mean for them.”

Other Japanese companies were not under the pressure from global exposure of government ties. Companies such as Aeon, which seeks to build a shopping mall in Myanmar, and auto-parts maker Denso therefore seemed less focused on the optics and more concerned about basic logistics such as how to reach their people inside Burma, as lines of communication were silenced during the military’s overthrow of Aung San Suu Kyi.

Follow us on Twitter or subscribe to our email list