Kirin will end its brewing joint ventures with ties to Myanmar’s army after the Japanese company denounced the coup that overthrew Aung San Suu Kyi’s government as against its human rights policy.
People close to Kirin stressed that it was not planning to exit the south-east Asian country entirely, but the development makes the company’s future there highly uncertain. The decision also underscores the impact the coup could have on the more than 400 Japanese companies that have entered Myanmar in anticipation of its democratic transition.
“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 democratisation,” Kirin said on Friday.
“Given the current circumstances, we have no option but to terminate our current JV partnership” with military-controlled Myanma Economic Holdings Public Company, it added.
Kirin was already under pressure from activists to pull out of its two JVs with MEHL after an investigation failed to uncover whether proceeds went to the military, which has been accused of crimes against humanity.
Kirin’s position became unsustainable this week after the military seized power and arrested Aung San Suu Kyi, Myanmar’s democratically elected leader, President Win Myint and other officials. The coup was condemned by the US and EU, and China has joined other UN Security Council members in calling for the release of detained officials. Joe Biden, the US president, this week threatened to impose sanctions on the country.
Japan is a big foreign investor in Myanmar, with carmaker Toyota, finance group Daiwa Securities and trading house Mitsubishi among the companies operating in the country. But many businesses have been more guarded in their condemnation of the coup.
Myanmar Brewery, the larger of Kirin’s two beer JVs, accounts for less than 2 per cent of the Japanese group’s global revenue. However, the controversy around its military links surfaced in 2019 during the acquisition of Colorado-based New Belgium Brewing, with employees of the US company opposing the deal over human rights concerns.
An international UN fact-finding team in 2019 called on businesses to cut ties with MEHL and Myanmar Economic Corporation, a second enterprise with ties to the country’s military.
Kirin has explored a range of options over the past year, including changing the ownership of its JVs to remove connections to the military.
But the feasibility of those moves remained unclear and analysts have said the company may have to sell its stake in the JVs in the wake of pressure from human rights groups.
Justice for Myanmar, an advocacy group calling for businesses to cut their ties to military-controlled companies, said Kirin had “finally listened” to calls for it to pull out of the JVs.
“Kirin’s bold and timely move to cut ties sends a strong message to the Myanmar military that their illegitimate and brutal coup and continued genocide, war crimes and crimes against humanity will not be tolerated,” the group said.
Amnesty International also welcomed the news. “We call on all other businesses linked to the financing of the Myanmar military to do the same,” Ming Yu Hah, the group’s deputy regional director for campaigns, said.