Japanese beverage giant Kirin Holdings said Monday 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.
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.
Earlier, the company 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.
A response from the Myanmar company was not immediately available.
Myanmar Brewery, founded in 1995, produces beers under the Myanmar, Kirin Ichiban, Andaman Gold and Black Shield brand names. It was unclear if the brewery would continue to make Kirin Ichiban after the venture ends.
Kirin said it was recording an impairment loss for 2021 on its business in Myanmar of 68 billion yen ($580 million).
