Kirin Holdings Co yesterday said that it was undecided on the future of its Myanmar beer business after a third-party probe into its local partner’s military connections ended with inconclusive results.
Kirin had hired Deloitte Tohmatsu Financial Advisory to investigate after the UN identified owners of its local partner, Myanmar Economic Holdings Public Co (MEHL), as members of the military, which has been accused of genocide and other war crimes against the Rohingya.
Myanmar denies genocide, saying its military was carrying out legitimate operations against Rohingya insurgents who attacked police posts.
“Unfortunately, the assessment was inconclusive as a result of Deloitte being unable to access sufficient information required to make a definitive determination,” Kirin said in a statement.
Myanmar Economic Holdings officials were not available for comment.
Groups including Amnesty International have called on Kirin and other companies to cut ties with Myanmar Economic Holdings.
Kirin in November last year said that it was halting payments from the beer ventures to Myanmar Economic Holdings, a suspension it said would continue until a solution was found.
Kirin acquired a majority stake in Myanmar Brewery in 2015, part of billions of dollars in foreign investment that flooded into Myanmar that year with the partial lifting of international sanctions.
Later that year, Burmese State Councilor Aung San Suu Kyi’s party won the first free election in 25 years.
However, many foreign investors have since grown wary about Myanmar amid worries about stalled political reforms and the persecution of the Rohingya Muslim minority, even as some eye its emerging consumer market with interest.
It was unclear what steps Kirin would take next.
Aid groups have said that exiting Myanmar is not necessarily the answer, as that would leave the beer venture’s ties to the military intact.
“It is certainly possible to do business in Myanmar without enriching the military and companies should engage in human rights due diligence to ensure that they do not enter into a business relationship with MEHL or any other Myanmar military entity,” Amnesty International business and human rights adviser William Nee said ahead of Kirin’s announcement.
Myanmar accounts for less than 5 percent of Kirin’s global beer sales, but it is one of the few growing beer markets for Kirin as sales in its home market, Japan, continue to shrink due to an aging population.
Kirin’s beer business in Myanmar follows other overseas ventures that have posed challenges for the firm.
In 2017, it sold its unprofitable Brazilian unit, including the Schincariol brand, to Heineken after losing market share.
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