Japan & Myanmar: Kirin to invest US4.3 mln in 51% of joint venture with Mandalay Brewery owner MEHL

Hiroshi Fujikawa, resident director of Myanmar Brewery Limited, said Kirin will invest US$4.3 million for 51 percent of a joint-venture with Myanma Economic Holdings Limited (MEHL) thus denying reports of intended acquisition of the Myanmar company, the Myanmar Times reported on February 15.

“We are happy if we could enhance the market position of ‘Mandalay Beer’ brand which is the oldest and most iconic in this market,” he said exclusively to the Myanmar Times.

An anonymous high-ranking official from the MEHL said to the Myanmar Times that the joint-venture proposal to Myanmar Investment Commission (MIC) was submitted in January 2017.

“Kirin is not ‘buying’ the brewery. Kirin has made an application for MIC to set up a joint venture with the MEHL. The date of incorporation will be subject to yes or no and its timing of approval by the MIC,” Hiroshi Fujikawa said.

When Kirin talked with MEHL about Myanmar Brewery Limited a few years ago, Kirin raised the issue of possible investment into Mandalay Brewery as well to create a synergy between two companies. But Kirin focused on managing Myanmar Brewery Limited first at that time, he added.

“We do not have a specific picture [plan] of combining two companies for the time being. We will operate two companies separately and independently. We are also interested in exporting Mandalay products if there will be some demand in other countries,” he said.

The MEHL official told the Myanmar Times that the “Mandalay Beer” market share is very low compared to Myanmar Beer, and there has not been market competition with other international beer brands in other countries.

“It is mostly consumed only in Mandalay. And ‘Mandalay Beer’ also needs investment to upgrade and penetrate the market. [This is] because it was left [with nothing apart from] only the strong reputation of [as] Myanmar’s first beer brand from the 1980s,” the official said.

On 13 February, the AFP reported that Kirin hopes to strengthen its presence in the Asia-Oceania region by acquiring a majority stake in Myanmar’s Mandalay Brewery for $4.33 million from military-backed Myanmar Economic Holdings. The news agency reported that the deal would give the Japanese brewery control of the country’s oldest brewery, and 90 percent of Myanmar’s beer market, a company spokeswoman said. Kirin bought local market leader Myanmar Brewery in 2015.

All over Myanmar, Myanmar Beer along with another domestic brand Dagon Beer have dominated the beer market since the early 1990s, when the military regime established the Union of Myanmar Economic Holdings Limited (UMEHL) conglomerate and founded Myanmar Brewery Limited. At the time, an import ban on foreign beer ensured their hold on Myanmar’s drinkers. Drinking beer became a de facto toast to the military elite.


Mandalay Brewery, based in the northern city of Mandalay, is the country's oldest brewery. It operates as part of the military-backed Myanmar Economic Holdings and has a market share of just under 10% in Myanmar.

Myanmar is one of the few growing beer markets amid lackluster momentum in global consumption. Even in China, the world's biggest market, consumption has declined.

Myanmar's beer consumption in 2014 reached 210,000 kilolitres. Per-capita volume was a mere tenth or so that in Southeast Asian neighbors Thailand and Vietnam. But with its economy growing rapidly, beer drinking is on the rise, mainly in cities. The market is expected to more than double from 2013 levels by 2018.

Kirin seeks to focus investment in Asia to cultivate its earnings base, but competition is heating up there as demand grows.

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