Clearly, a happy coincidence, but I’ll count it as a win. Last week, two days before Kirin announced it would terminate its current joint-venture partnership with Myanma Economic Holdings Public Company Limited, I posted about how the beer giant still owns a majority stake in Myanmar and Mandalay breweries, which help fund the Myanmar military. I opined:
Kirin has continued to sidestep arguments on its compromising business deals in Myanmar for years, and as a human and a discerning beer drinker, this course of action absolutely baffles and troubles me. But hey, I guess a country under the stress of an extremely scary military-run government is going to be drinking lots more beer, so maybe this is just good business.
Well, last Friday, Kirin issued a statement on its situation in Myanmar, finally deciding it would terminate its dealings with Myanma Economic Holdings:
Kirin Holdings Company, Limited (President and CEO: Yoshinori Isozaki) is deeply concerned by the recent actions of the military in Myanmar, which are against our standards and Human Rights Policy.
We decided to invest in Myanmar in 2015, believing that, through our business, we could contribute positively to the people and the economy of the country as it entered an important period of democratization. Our aspiration was and remains to create a positive impact on Myanmar’s economy and society through our operations at Myanmar Brewery Limited and Mandalay Brewery Limited.
Given the current circumstances, we have no option but to terminate our current joint-venture partnership with Myanma Economic Holdings Public Company Limited, which provides the service of welfare fund management for the military. We will be taking steps as a matter of urgency to put this termination into effect.
We will aim to provide updates as soon as practicably possible.
According to The Japan Times:
Bernstein Research said it valued Kirin’s stake in the joint venture at $1.4 billion to $1.7 billion.
“However, given the current political climate in Myanmar and the minority partner, any buyer would face material reputational risk … and Kirin would likely have to accept a discount,” said the brokerage in a note issued earlier this week.
Myanmar accounts for less than 5% of Kirin’s global beer sales, but it is one of the few growing beer markets for Kirin as sales in its home market, Japan, continue to shrink due to an aging population.
Final question: What took so long?