MYANMAR – Kirin Holdings has finalized the sale of its 51% stake in its Myanmar joint venture Myanma Economic Holdings Public Company Limited (MEHPCL), to its military-linked partner in the businesses Myanmar Brewery Limited (MBL) for 20.5 billion yen (US$160m).

Kirin Holdings said it decided the transfer of shares to MBL (MBL share buyback) was the most suitable means to terminate the joint venture as soon as possible.

The move signaled the end of a row between the two companies triggered by a military coup in the country last year.

Kirin entered the country seven years ago, acquiring majority control of Myanmar Brewery Ltd (MBL). It bought an interest in a second brewer, Mandalay Brewery, two years later. Myanma Economic Holdings Public Company Limited (MEHPCL) held the remaining shares in both beer makers.

The partnership was brought into question three years ago when MEHPCL was linked to the country’s military in a report by the UN.

In the past filing, Japan-based Kirin said its Singapore subsidiary will sell its shares in MBL back to the brewery for JPY22.4bn (US$165.8m).

In 2021, MBL generated revenue of MMK282.8bn (US$152.6m) and a “normalized” operating profit of MMK96.5bn. A year earlier, it had booked revenue of MMK408.7bn and a normalized operating profit of MMK177.3bn.

During the announcement of the transfer in June 2022, a spokesperson said: “Kirin’s decision to hand over control of Myanmar Brewery and Mandalay Brewery to military conglomerate Myanma Economic Holdings Limited is a windfall for the Myanmar military and will ensure a continued stream of revenue to finance atrocity crimes.”

Concerning the impact on business performance, Kirin said the divestment has a translation difference of approximately 19 billion yen from foreign operating activities arising from the Myanmar business, which is recorded in shareholders’ equity and will be transferred to other operating expenses as a loss on sales of subsidiary stock.

A stock transfer for Mandalay Brewery Limited, another joint venture with MEHPCL, has been agreed to in a similar manner and schedule, but the impact on the Kirin Group will be minimal.

The move is simultaneous to an order from Consumer Affairs Agency in Japan which requires Kirin Beverage to pay a ¥19.15 million (US$150k) fine for claiming a drink containing about 2% melon juice had a “100% melon taste.”

The Consumer Affairs Agency said the company had violated the Law against Unjustifiable Premiums and Misleading Representations by using a carton printed with misleading wording, according to an announcement by the agency.

The agency claimed that from June 2020 to April 2022, Tropicana 100% Marugoto Kajitsukan Melon Taste juice was sold in a package printed with a large illustration of a melon alongside misleading claims making consumers to thinking the drink was mostly melon juice — such as that from gensen (carefully selected) musk melon. However, 98% of the drink comprised grape, apple, and banana juices.

On Sept. 6 last year, the agency issued the company with an order to take preventive measures to avoid recurrence.

Kirin responded by saying the company intended to strengthen its package-checking systems to avoid the same thing happening again.

For all the latest food industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.