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Beer brands tap new Asia markets

News, 13 July 2015

KUALA LUMPUR: Heineken was due to open a new facility in Myanmar (Burma) over the weekend, as competition intensifies between global beer brands keen to expand in a market seen as having "huge potential for growth".

The Dutch brewer's new $60m brewery near Yangon, formerly Rangoon, has the capacity to produce 100m litres of beer a year and will give it the means to take on Carlsberg of Denmark, which opened its own manufacturing site two months ago.

Both European companies want to take on the dominance of the state-owned Myanmar Brewery, which has more than 80% of market share, the Financial Times reported.

Heineken and other major brewers left Myanmar two decades ago when international sanctions were imposed on the country's former military rulers.

But with the political situation having since changed, they see Myanmar's youthful population and a current low consumption rate of just three litres per person a year as reasons enough to shift their focus from the relatively sluggish markets of Europe.

"It's very clear when you look at the region that Myanmar is one of the unusual territories where there is a huge potential for growth in the beer industry," said Roland Pirmez, president of Heineken Asia Pacific. "Of course all the international players are looking at the market."

The company's two-pronged strategy is to use a new brand, called Regal Seven, to compete on price with Myanmar Brewery and then, once established with consumers, hope they migrate to the Heineken brand.

International brewers can also take encouragement after a report from the Vietnam Alcohol, Beer and Beverage Association revealed that high-end beer brands now account for 7% of market share in the country.

Foreign canned beer, in particular, is growing in popularity as the Vietnamese middle-class continues to grow and tastes shift from local draft beer, VietnamNet reported.

Vietnam has been a focus for Heineken and other major beer brand owners for some time and several, including Belgian-Brazilian AB InBev and Japan's Sapporo, have production facilities there.

Data sourced from Financial Times, VietnamNet; additional content by Warc staff