Kirin, owner of Lion Australia, is withdrawing from a Myanmar joint venture which has been a point of contention following a military takeover in the country.

Kirin announced yesterday that it has decided to “urgently terminate” the partnership with Myanmar Economic Holdings Public Company Limited, which provides welfare fund management services for the military.

The owner of Lion Australia, Lion New Zealand and Lion Little World Beverages, faced criticism from all sides for the partnership. Kirin said it regrets the military takeover, as it is “against Kirin Holdings’ standards and Human Rights Policy”.

“Over the following year, Kirin Holdings took every measure to find a way forward that would allow it to continue to contribute to Myanmar’s economy and society through the beer business,” a statement from Kirin said on Monday (14th February).

“These included discussions with MEHPCL and filing for arbitration in Singapore, seeking to terminate the joint venture. In the end, Kirin Holdings determined that it would be difficult to quickly terminate the joint venture in the manner it desires.

“Therefore, Kirin Holdings has now commenced and is proceeding with discussions with MEHPCL in order to withdraw from the business in Myanmar, giving top priority to the termination of the joint venture as soon as possible.”

Kirin issued an earnings warning as a result of the withdrawal, which will leave it with an impairment loss on its Myanmar business for the year to 31st December 2021.

In Australia, Lion has been in the vanguard of policies of diversity and inclusion, and its recent acquisition of Stone & Wood seemed at odds with the wider group’s participation in the Myanmar joint venture.

At the same time as the Myanmar announcement, Kirin announced its medium-term business plan for 2022-24, which focuses on increasing profit in its food and beverage sectors.

Lion, it said, will be focusing on improving profitability through marketing reform and supply chain optimisation.

Kirin explained that Lion would also be focusing on the integration of its acquired craft beer businesses, such as Stone & Wood which it acquired last year, and New Belgium in the US. The Japanese firm said that it wanted the company to “create synergies” to accelerate the craft beer businesses in North America and Australia.