Kirin aims to brew up a storm with MBL stake

Beer drinkers are poised to celebrate a bigger selection of quaffing options under a move by Myanmar Brewery Limited to launch at least two new products in a market thirsty for choice.

Japan’s Kirin Holdings, which acquired a majority stake in MBL in August, is developing a yet-to-be named “domestic premium” lager and will also brew its flagship international brand, Kirin Beer.

MBL, which brews top-selling Myanmar Beer, has an estimated share of the beer market of between 75 percent and 80 percent, but is facing competition with the arrival of Heineken and Carlsberg, the world’s third and fourth largest brewers respectively.

“We don’t want to lose our market share, so we have to develop an international premium in Kirin Beer and a domestic premium beer,” said Mr Tetsuhiko Sato, Kirin Myanmar’s general manager.

Mr Sato said the plan for the domestic premium lager was “exciting” but declined to elaborate.

MBL has begun marketing Black Shield stout to replace ABC Extra Stout, which the brewery ceased making after Heineken resumed operations in Myanmar.

Black Shield was launched on September 9 and is 8.1 percent proof, with the numbers adding up to nine, a lucky number in Myanmar, said Mr Sato.

He hinted at changes to market-leading Myanmar Beer, which is being sold as a “domestic standard” product.

“We are proud of Myanmar Beer but we also have to enhance it further,” he said, adding that although there were plans to export the popular brew, Kirin’s initial focus would be on building bigger domestic market share.

As part of this strategy, the company would continue to make Andaman Beer, which Mr Sato said was meeting a need in the market for an “economy” product.

“Other companies are working away from the economy beer, but the consumer needs it, so we want to deliver for the consumer’s needs,” he said, reiterating the domestic market focus.

“Myanmar Brewery is growing so rapidly that we cannot catch the supply up with the demand, but once we are up to full capacity, we can move forward with export plans,” said Mr Sato. As well as Japan, other future export markets included Australia, the United States, Brazil and Europe.

Kirin Holdings became the majority shareholder in Myanmar Brewery on August 19 when it acquired Fraser and Neave’s 55 percent stake for US$560 million.

Myanmar Brewery celebrates its 20th anniversary this year. It was established in 1995 by the military-owned conglomerate Myanmar Economic Holdings Ltd., in partnership with Asia-Pacific Breweries Ltd., then a joint venture between Singapore-based F&N and Heineken, which helped to build the brewery.

Heineken withdrew from the partnership in 1996, amid a tightening of sanctions and campaigns in Western countries targeting companies that had invested in Myanmar, and F&N acquired APB’s stake in the brewery in 1997.

The return to the market of Heineken means that under the terms of an agreement it signed in 1995 with MBL, the brewery has also ceased making Tiger Beer, as well as ABC Extra Stout.

Heineken’s brewery at Hmawbi, on Yangon’s northern outskirts, began making its mainstream Regal Seven beer in August and is due to begin brewing its flagship Heineken brand by year’s end. Carlsberg is making a Myanmar brand, Yoma beer, with plans to make its premium Carlsberg and Tuborg brands by the end of the year, at the brewery it opened at Bago in May.

Mr Sato acknowledges that Carlsberg and Heineken will prove a challenge to Myanmar Brewery but is confident the company can maintain its market lead.

“Heineken and Carlsberg are global players, but it will be tough for them because Myanmar Brewery already has a good asset and we have also established our routes and markets,” he said.

MBL has an annual production capacity of two million hectolitres (about 44 million UK gallons), which it plans to double over the next five years to meet expected rise in demand.

There’s little doubt about the potential for market growth.

Myanmar is one of the world’s most promising beer markets, with figures for 2013 from research firm Euromonitor putting annual beer consumption at 3.2 litres a person, compared to 31 litres in Thailand.

Euromonitor forecasts that the value of the beer market will double from an estimated US$375 million this year, to $675 million in 2018.

Source: Frontier Myanmar

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