Myanmar Beer undergoes facelift as it takes on new rivals

Sat Dec 19, 2015 8:26pm EST
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By Timothy Mclaughlin

YANGON (Reuters) - Drinkers buying a beer at Yangon's roadside bar shacks used to face a limited choice: more likely than not, they would order a mug of Myanmar Beer, sometimes with a shot of coarse whisky to give the light local brew an extra kick.

These days there is more variety, thanks to the arrival of Denmark's Carlsberg (CARLb.CO: Quote) and its Dutch rival Heineken (HEIN.AS: Quote), which began brewing in Myanmar this year as economic reforms uncorked a market protected under military rule.

Now, Myanmar Brewery Limited (MBL), the military-linked producer of the old favorite Myanmar Beer and four other brands, faces stiff competition from global giants for a rapidly growing consumer market set to lift beer consumption from among Asia's lowest.

Just months after opening, Heineken is doing so well it plans to double capacity at its Yangon facility to 50 million liters from 25 million liters, said Lester Tan, managing director at the APB Alliance Brewery Company which produces Heineken.

The company has accelerated an expansion plan it had expected to execute after three or four years, he said.

"Heineken volumes have just gone through the roof, it has taken us all by surprise," Tan said.

Heineken's economy brand Regal Seven is "slowly chipping away" at Myanmar Beer's competitive advantage, he said.

Still, Myanmar Beer commands about two-thirds of the country's beer market by volume. And the company has not sat complacently on its market dominance - like other state-backed firms, MBL has moved swiftly to overhaul both its image and products to appeal to Myanmar's new consumers.   Continued...

A waiter carries a tower of Myanmar beer in 19th street, also known as Yangon beer street in Yangon December 8, 2015. REUTERS/Soe Zeya Tun