Heineken joins foreign brewers seeking to slake Myanmar’s thirst
YANGON - Reuters
Waiters prepare glasses of beer for guests during the opening ceremony of the Heineken Beer factory outside Yangon July 12, 2015. Reuters PhotoInternational brewers are trickling into Myanmar, betting that higher incomes and economic reforms will whip up a thirst for foreign beer in a market that has long been dominated by state-owned firms.
Heineken NV, the world’s third-largest brewer, on July 12 opened a $60 million brewery joint-venture just outside Yangon, returning to one of Asia’s most promising beer markets after exiting in 1997 amid international condemnation of the human rights abuses of the military government at that time.
Heineken’s Regal Seven beer is set to rival the Tuborg and Yoma brands by Carlsberg, which in May became the first foreign brewer to set up in Myanmar as it emerges from 49 years of military rule.
“Myanmar is on faster trajectory of growth and its disposable income will rise for common people in coming years,” said Vijay Dhayal, senior consultant at financial advisors New Crossroads Asia.
Myanmar’s beer industry is dominated by state-backed Myanmar Brewery, and beer consumption rates are some of the lowest in Asia at just 3.2 liters per person in 2013, according to the latest data from research firm Euromonitor International, well below the 31 liters per person in neighboring Thailand.
But with consumer spending expected to rise as economic reforms kick in, foreign brewers hope Burmese will want more beer, especially the branded kind. Euromonitor forecasts the value of the beer market to almost double to $675 million in three years time from an estimated $375 million this year.
Heineken’s Myanmar brewery is a joint venture with privately owned Alliance Brewery Co Ltd (ABC), majority-owned by local spirits entrepreneur Aung Moe Kyaw.
Analysts, however, say the dominance of Myanmar Brewery, which has an 80 percent market share, will be tough to crack.
“This will not be an easy game for foreign firms,” said Alec Maurice, Business Development Officer at consultancy Thura Swiss. “Myanmar consumers are often very loyal to their brands, especially in the beer sector.”