Japanese drinks giant Kirin Holdings said on Friday it was scrapping its beer alliance with a top Myanmar conglomerate whose owners have been identified by the United Nations as members of the military, which overthrew the elected government this week.
Kirin has been under pressure to reassess the tie-up with Myanmar Economic Holdings Public Company (MEHL) due to the local partner’s military connections.
The Myanmar military on Monday overthrew the elected government of leader Aung San Suu Kyi, handing power to its top general and declaring a one-year state of emergency, sparking widespread international condemnation.
The military had earlier been accused of genocide and other war crimes against the Rohingya minority after hundreds of thousands fled an offensive in 2017. Myanmar denies genocide.
“Given the current circumstances, we have no option but to terminate our current joint-venture partnership with Myanmar Economic Holdings Public Company Limited, which provides the service of welfare fund management for the military,” Kirin said in a statement on Friday.
“We will be taking steps as a matter of urgency to put this termination into effect.”
Kirin acquired a majority stake in Myanmar Brewery in 2015, part of billions of dollars in foreign investment which flooded into the country with the partial lifting of international sanctions. Later that year, Suu Kyi’s party won the first free election in 25 years.
Even before the recent coup, groups such as Amnesty International had been calling on Kirin and other companies to cut ties with MEHL.
Faced with such pressure, Kirin hired third-party investigators to look into the business and said in November it was halting payments from the beer ventures to MEHL. But it had been undecided on how to resolve the issue.
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, continues to shrink due to an ageing population.
Kirin said on Friday it was not necessarily exiting Myanmar.
“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,” it said.
“We hope to find a way forward that will allow us to continue serving Myanmar and its people in the years to come.”