Thursday, September 21, 2017

‘Yoma’ beer to hit shelves by December

Danish brewer Carlsberg will begin production at its Myanmar factory next month as the company looks to become the first foreign producer approved by President U Thein Sein’s government to tap the country’s promising beer market.

Brewing is slated to begin the first week of October and the company will hold an opening ceremony with executives a month later, on December 5. Carlsberg will be brewing three beers at its factory in Bago, including Yoma, a new beer specifically crafted for the Myanmar market. The group’s flagship Carlsberg beer and Tuborg brand will also be produced at the site.

Yoma, which means “mountain range” in Myanmar language, will compete with Myanmar Beer in the mid-range category. The military-backed beer currently dominates the domestic market with a 64 percent share, according to research firm Euromonitor International.

Yoma was selected from around 10 possible names, according to Carlsberg Myanmar executive director U Thant Zin Tun. Though already used by a number of Myanmar companies, most notably Yoma Bank, U Thant Zin Tun said that the name tested well among the country’s rural population. The beer’s can will be predominately blue and feature a gold-coloured mountain emblem.

Tuborg, which has grown quickly in popularity in China since its launch there in 2012, will be aimed at younger consumers. Carlsberg will be marketed as a premium offering with a slightly higher price point.

Carlsberg Myanmar, a joint venture between the Copenhagen-headquartered Carlsberg and Myanmar Golden Star (MGS) Breweries, broke ground on their US$50 million brewery in October 2013.

Dutch rival Heineken quickly followed suit and the Myanmar Investment Commission has said that it anticipates granting one more licence to a foreign brewer this year. Beer

producers are eager to get a foothold in Myanmar’s beer market, a sector that has been controlled through a virtual monopoly by state and military owned enterprises for decades but has potential for strong growth.

Figures from Euromonitor International show that the legal beer market hit 172 million litres in 2013, with annual growth of 5.5pc since 2009. In dollar terms, beer sales amounted to US$265 million in 2013, and have posted 14pc growth over 2009-2013. Annual growth of 21pc is expected between 2014 and 2018, when the market will reach $675 million, according to Euromonitor.

Despite the growth, beer consumption in Myanmar remains low compared to other countries in the region. Myanmar drinkers consumed just 3.2 litres per person in 2013, far behind neighbouring Vietnam, where per-capita consumption was 36 litres, and the Asia pacific region average of 18 litres.

“There is still a very big market share out there. There is a lot of room,” said U Thant Zin Tun, who is also a member of the board of Myanmar Consolidated Media, which publishes The Myanmar Times.

Though taking on well-known brands such as Myanmar Beer will pose a challenge for Carlsberg, U Thant Zin Tun said this was not his primary concern. Instead, he worries about competition from illegally imported beer that flows through Myanmar’s porous borders, particularly with Thailand. Alcohol importers estimate that about 10 million bottles of beer are smuggled into Myanmar each year from Thailand.

Cans and bottles of Thai and other foreign beers land on shelves in Myanmar at prices significantly lower than those produced in-country because no tax has been paid. The government has only recently stepped up initiatives to combat the issue.

“We are not afraid of competing with Myanmar Beer or Dagon Beer, we are afraid of these illegal imports,” he said. “We will be killed by smuggled goods.”

Pricing for all three products has not been finalised, with Carlsberg still assessing the impact of an annual licence fee hike that was passed on September 1.

Krishna Jambur, associate director at market research firm Nielsen-MMRD, said that beer is predominantly drank at local beer stations in draught form, but that this has slowly begun to change. “On-location consumption is the largest method of consumption. However we are noticing that off-location consumption is on a steady rise,” Mr Jambur said.