The Myanmar government is prepared to relax limits on foreign ownership of breweries on a case-by-case basis, as it seeks to improve the appeal of the country to foreign investors, says a senior beer industry executive.
The Myanmar Investment Commission (MIC) offered four licenses in January for international breweries to operate domestically.
Under the Foreign Investment Law, which the MIC oversees, each foreign brewer must enter a joint venture with a domestic company and can own a 51% majority stake in the Myanmar operation. Two of the four licenses have been issued so far.
Thai Beverage (ThaiBev) won approval in February to produce its flagship Chang brand in breweries in Yangon, Mandalay and Shan State. The Danish brewer Carlsberg, the fourth largest in the world, won approval in the same month for a strategic partnership with Myanmar Golden Star breweries.
The MIC will now allow these companies to apply for full ownership, Myint Zaw, the senior chief operating officer Myanmar Brewery Limited (MBL), told Asia Focus. The next two companies that obtain will be able to negotiate for full ownership after partnering with a local company.
Myanmar’s largest breweries are still tightly controlled by the government’s economic holding entities. The country’s three biggest producing breweries “are stuck”, Myint Zaw said last Thursday on the sidelines of a marketing conference in Yangon.
“We are really not clear about the direction the government wants us to go in,” he said, adding that there were no indications from the MIC as to whether foreign investors would eventually be allowed to partner with government-held breweries.
Beer is big business in Myanmar, due to tight trade regulations and a thirsty consumer base: an incentive for the government to remain involved in breweries. The state entities that hold shares in the breweries were set up by the former military junta and are still linked to senior military figures.
“The government does not allow the import of beer,” Myint Zaw said. “MBL has been so successful because we have to adapt to local tastes.”