Kirin Holdings has officially taken a stake in Mandalay Brewery, the brewer of Mandalay Lager Beer, Mandalay Strong Beer and Mandalay Spirulina Beer.
Japanese brewer Kirin Holdings and military-linked Myanmar Economic Holdings Limited (MEHL) signed an agreement on the joint venture (JV) in Yangon in December. The JV received approval from the Myanmar Investment Commission in August.
Under the JV, a total of US$9 million will be invested in upgrading existing machinery and improving the beer quality at Mandalay Brewery.
Kirin will invest US$4.3 million for a 51% stake in the JV, while MEHL will own the remaining 49% in Mandalay Brewery, including machinery and land. The brewery is currently located in Mandalay and is the oldest and most iconic in Myanmar with a capacity of 170,000 hectolitres per year.
“The JV is for upgrading the machines and factory and upgrading the quality of the 5 beer brands Mandalay Brewery is currently producing. There are no plans to brew new products in the next 6 months,” said U Hla Myo, General Manager of the planning department of the MEHL.
For Kirin, the JV represents an expansion of its market share in Myanmar at a time when competition for one of the last beer markets in Asia is heating up. Myanmar’s beer market is attractive as it has one of the lowest beer consumption rates in ASEAN, with per capita annual consumption of only 5 litres, compared with 31 litres in Thailand and 36 litres in Vietnam.
Kirin first bought a 55% stake in Myanmar Brewery, which produces Myanmar Beer, in August 2015. The Japanese brewer bought the stake from Singapore-listed drinks maker Fraser and Neave (F&N) for US$560 million. Myanmar Beer has the largest share of the country’s beer market with more than 60% share. Since buying its stake in Myanmar Brewery, Kirin has launched several new brands in Myanmar including Myanmar Premium, Kirin Ichiban and Black Knight Stout.
As Kirin and MEHL move strategically to shore up market share, foreign brewers Heineken and Carlsberg are not far behind as they have already built their own breweries on the outskirts of Yangon. In Myanmar, Carlsberg brews its flagship beer as well as Tuborg and Yoma. In October , Heineken Myanmar launched a new product, Tiger Crystal. The beer, which has lower alcohol content of 4.5%, is expected to cater to the tastes of first-time beer drinkers in Myanmar. Heineken also brews its flagship beer as well as Regal Seven, ABC Stout as well as Tiger Beer.