Wednesday, July 26, 2017

A cola war brews in Myanmar

Image of the cola war on Yangon’s streets. Boothee / The Myanmar TimesImage of the cola war on Yangon’s streets. Boothee / The Myanmar Times

Travellers arriving at Yangon International Airport find themselves on the frontlines of a curious war being fought out between two of America’s cultural icons: Pepsi and Coca-Cola.

The first indications of battle are the huge and recently erected billboards that vie for attention on the road leading into Yangon city.

In this battle it was Pepsi that fired the first shot, announcing in August 9 its official re-entry into the Myanmar market by signing a distribution agreement with Diamond Star Co, a subsidiary of Capital Diamond Star Group. Indra Nooyi, PepsiCo chief executive officer, referred to Myanmar as “a market with great potential”.

What Mr Nooyi did not say was that it’s also a market without Pepsi’s biggest competitor – Coca-Cola.

PepsiCo entered Myanmar in 1991 in partnership with Myanmar Golden Star Co (MGS) but left the country in 1997 amid mounting pressure from human rights groups and international sanctions as the country’s military regime cracked down on pro democracy groups.

And although Pepsi’s stint in the country was short-lived, MGS president U Thein Tun is still frequently referred to as Pepsi Thein Tun for his role in bringing the company to Myanmar.

Coca-Cola returned fire in September, when its entrance into the market garnered significant media attention. Coca-Cola chief executive officer Muhtar Kent made an appearance in Yangon, posing for photos as he symbolically passed a case of Coke to a thanakha-painted shopkeeper.

Speculation on Coca-Cola’s arrival had been ongoing for months before the announced partnership with Pinya Manufacturing. Like the PepsiCo deal, the agreement concerns the distribution of Coca-Cola, with no reference as yet to a manufacturing deal.

Though no numbers on the scale of their operation are yet available, a Coca-Cola spokesperson said, “Our intent is to invest significant capital over the coming years, generating thousands of jobs”.

Coca-Cola’s partner, Pinya, produces the popular Max brand soft-drinks but company officials refused to comment on its agreement.

The US company’s 60-year absence was a popular narrative amongst members of the foreign media who used it, to the befuddlement of Myanmar residents, to illustrate Myanmar’s years of isolation. Coke’s alleged absence was often used to compare Myanmar to the world’s two other countries left untouched by the soft drink giant, North Korea and Cuba.

And despite the carefully crafted advertising blitzkrieg from both companies, enthusiasm on the ground for the brands’ arrivals has been decidedly muted.

The lack of fanfare can be attributed in large part to the fact that both Coca-Cola and PepsiCo products have long been available in Myanmar, despite their lack of official country operations. Cans and bottles of Pepsi, Coke, Coke Zero, Sprite, 7-UP and Miranda have been streaming across the country’s porous borders for years.

Yangon’s upscale supermarkets offer shoppers a choice of Coke imported from Thailand, Malaysia and Singapore, all differing slightly in price and all imported illegally. Occasionally cans from as far off as Hong Kong appear on shelves.