Pernod Ricard plans Myanmar whisky expansion

Pernod Ricard is expanding its whisky footprint in Myanmar having acquired a majority stake in a new joint venture with private equity firm Yoma Strategic, making it the first major global producer of wine and spirits to enter the market.

The deal is expected to complete in 2019

The focus of the partnership, within which Pernod will hold a majority share, will be on the production and distribution of whisky in Myanmar.

The remaining equity will be split between Yoma Strategic, private equity firm Delta Capital Myanmar and distiller Win Brothers.

Pernod has said it plans to appoint a senior management team to head up operations in the country, with its entry into the market the first time a major global producer of wine and spirits has established a formal presence in Myanmar.

The agreement will see Yoma’s Myanmar-made High Class whisky brand become part of Pernod Riacrd’s portfolio, complementing the growth of Pernod’s Chivas and Ballantine’s whisky brands in Asia.

Holding the largest share in the partnership, Pernod will also take the lead in management of the production facilities, distribution and brand portfolio of Access Myanmar Distribution Company Ltd. (“AMDC”) – the current joint venture between Yoma Strategic, Win Brothers and Delta Capital Myanmar.

This will give the company access to more than 40,000 points of sale, 43 major wholesalers, around 230 delivery vehicles and around 250 staff dedicated to sales and marketing, as well as the High Class whisky brand.

“We are delighted to start our journey in Myanmar, a very promising and dynamic market which has seen tremendous economic progress over the past years,” said Philippe Guettat, chairman and CEO of Pernod Ricard Asia. “High Class whisky has already built a solid foundation in the market, and we are committed to growing the brand further by leveraging our experience and capabilities.”

Yoma Strategic’s High Class whisky brand will become part of Pernod’s portfolio as part of the partnership

Investment in Myanmar has been building in recent years, with several big wine and spirits producers positioning themselves within the market.

Most recently, ThaiBev, the Thailand-based spirits and beer maker, bought a 75% stake in Myanmar Distillery Company (MDC), the producer of Myanmar’s leading whisky brand Crown Royal and its supply chain, for S$1 billion (US$494.4m).

Elsewhere, in 2015 Japan’s Kirin Holdings took control of the Myanmar Brewery (MBL), the country’s largest brewery, in a deal worth US$560 million, while Dutch brewer Heineken opened a new brewery in the country after a 20-year absence – just two months after Carlsberg opened a $75m brewery there.

Increased investment has followed political upheaval in the country, with many major producers choosing to suspend their activities in Myanmar two decades ago when the country was hit by international sanctions due to the widely condemned actions of the country’s former military rulers.

Now democratised, international businesses are now returning to the country.

Pernod’s partnership with Yoma is expected to complete in 2019.