Heineken seeks expansion permit

The Dutch brewer has only been in the country for a month, but demand is already so high it can’t produce enough, said Lester Tan, managing director of APB Alliance Brewery Company, a joint venture between Heineken and Myanmar’s Alliance Brewery.

“Demand is in excess of our calculations. We’re now expanding to make sure we can produce enough. It’s a good problem, but it is a problem.”

The company is here for the long haul, aiming to lead the international premium beer market, Mr Tan said.

“We’re starting with Yangon and Mandalay, but eventually will expand to the rest of the country,” he said.

Its curent capacity is 225,000 hectolitres, or almost 20,000 hectolitres a month, he said.

“We need to apply to the Myanmar Investment Commission for a permit to expand. Next year we think we can distribute to the rest of the country – if Yangon doesn’t drink all the production.”

Mr Tan played down the prospect of competition with the incumbent Myanmar Beer, which he described as a “mainstream” product rather than a competitor in the premium market.

“We want to capture a large proportion of the international premium segment. Myanmar Beer is in the mainstream segment, catering to a different market. Our brand in that market will not be Heineken, but Regal Seven,” he said, adding that he anticipates more competition coming in.

“We’re very positive about the country, as it’s growing very quickly,” he said. But there is a long way to go.

“National beer consumption is only 3 litres per capita. In Germany, it’s 80 litres per capita, and China is also coming up very fast. Myanmar consumption is one of the lowest in the world. But there is no cultural or religious opposition to alcohol, like in the Middle East,” he said.

The Heineken brewery is licensed to produce only for the domestic market, though a future “Made in Myanmar” export brand of Heineken cannot be ruled out, said Mr Tan.

With the recent and anticipated entry of Carlsberg and Japan’s Kirin Holdings, the beer market in Myanmar is developing fast.

“Heineken is the most international brewery in the world. We must be doing something right to appeal to so many countries.,” he added.

In July, research firm BMI called Myanmar’s untapped beer-drinking potential “tremendous” and said the beer sector will see high levels of foreign investment in the next five years, as global brewers seek out alternative growth drivers.

Increased competition as Heineken and rival Carlsberg challenge Myanmar Beer – will help develop the sector and fuel beer consumption, it said.

Source: Myanmar Times

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