Japan's Kirin seeks arbitration to help end Myanmar venture

Japanese beverage giant Kirin Holdings is seeking commercial arbitration in a dispute over unwinding its joint venture brewery in Myanmar

Japan Myanmar Kirin (Copyright 2020 The Associated Press. All rights reserved.)

Japanese beverage giant Kirin Holdings said Monday it is seeking commercial arbitration in a dispute over unwinding its joint venture brewery in Myanmar

The company said it filed for arbitration in Singapore against Myanma Economic Holdings Plc, a military-controlled company, to end their venture Myanmar Brewery.

MEHL has petitioned for liquidation of the venture, which Kirin said violated the joint venture agreement and was an “unjustified motion.” It said it has sought an injunction in Singapore's High Court on Dec. 2 and was also asking a court in Myanmar to dismiss MEHL's petition.

Kirin, owner of the San Miguel, Fat Tire and Lion brands, announced it would withdraw from the venture soon after Myanmar’s military seized power from its elected government on Feb. 1.

The Tokyo-based company said negotiations with MEHL have been delayed by “political instability, worsening safety concerns and the surge in COVID-19 infections in Myanmar, and there has been no meaningful progress in the discussions. ..."

The Myanmar company “has been uncooperative,” it said.

A response from the Myanmar company was not immediately available.

At the time it announced it would pull out of Myanmar Brewery, Kirin said it was doing it as a “matter of urgency."

Kirin said it also objected to the liquidation petition because of doubts about the “fairness and appropriateness" of the process.

Kirin said in its statement Monday that it was seeking to end the joint venture with “utmost consideration" for the safety of local staff and their families, business partners and customers."

“The goal of contributing to Myanmar's economy and society through the beer business remains unchanged," it said.

Kirin earlier reported that Myanmar Brewery's operating profit fell 5.3% in the July-September quarter from a year earlier thanks to slower sales and rising costs.

The Myanmar operations produce beers under the Myanmar, Kirin Ichiban, Andaman Gold and Black Shield brand names. The joint venture was set up in 1995.