Fraser and Neave (F&N), a food, beverage and publishing conglomerate in Singapore in which Thai Beverage Public Company (ThaiBev) holds a majority stake, has gained approval from Myanmar’s investment commission to return to the country’s beer market.
The two partners founded Emerald Brewery Myanmar last December in which Than Lwin Aye Yar Industrial Production & Construction Co., a local company, which is said to have close ties to the government, holds 51% with the rest owned by F&N Investments, a wholly owned subsidiary of F&N.
It’s less than three years ago that F&N left the market. In August 2015, after a two-year legal battle in Singapore between F&N and its local partner, Union of Myanma Economic Holdings (UMEHL), one of Myanmar’s two military-run conglomerates, the company sold its 55 percent stake in Myanmar’s largest brewery Myanmar Brewery to Japan’s Kirin Holdings for US$560 million. In order to level the ratio to a 49/51 stake, UMEHL has since bought a 4% stake in Myanmar Brewery from Kirin for US$40 million.
Last year, the Japanese brewer increased its presence in Myanmar by setting up another joint venture between Kirin and Mandalay Brewery, the country’s oldest and most iconic brewery with a capacity of about 100,000 hectoliters a year. (inside.beer, 12..2017) The Myanmar Investment Commission (MIC) approved in September the plan to invest US$9 million to upgrade the quality of machinery and beer at Mandalay Brewery.
With its recent move F&N is fighting back against former partner UMEHL. Together with its new local partner, F&N plans to build a new brewery, which will then not only compete against UMEHL and Kirin but also against Heineken and Carlsberg.
The two European brewers have each built their own breweries on the outskirts on Yangon, where Carlsberg brews the brands Carlsberg, Tuborg and Yoma. Meanwhile, Heineken competes with its flagship brand Heineken, Regal Seven, ABC Stout and Tiger Beer, a brand, which the Dutch company bought when it acquired Asia Pacific Breweries (APB) from F&N in 2013.
After increasing its stake in F&N ThaiBev uses the company to expand its business outside of Thailand. In December, ThaiBev secured in an auction 54% of the shares of Vietnam’s leading brewer Sabeco. (inside.beer, 18.12.2017)
The shares were bought by Vietnam Beverage, a wholly owned subsidiary of Vietnam F&B Alliance Investment, a local unit of F&N. One month before the group bought a 49% stake in F&B Alliance, apparently with the sole intent of bidding for Sabeco, since foreign companies were restricted to bid for more than 35% of Sabeco’s shares.
