Trading firm sues Myanmar Carlsberg for ‘cheating’ over sales promotion

By YE MON | FRONTIER

YANGON — Six senior employees of the local arm of Danish brewing giant Carlsberg, including its managing director, are facing up to seven years in prison due to a dispute with a distributor over a promotional deal.

Myat Hmwei Trading Company has accused the Myanmar Carlsberg Company employees of cheating under section 420 of the Penal Code, which carries a punishment of up to seven years’ imprisonment and a fine. The next hearing is set for September 5 at Thingangyun Township Court.

Myat Hmwei managing director U Ye Tun told Frontier at his office in Yangon on August 27 that Myanmar Carlsberg owed his company cartons of Yoma Beer worth the equivalent of K600 million (US$395,000).

The complaint to police under section 420 relates to Yoma Beer worth more than K200 million, he said.

Support more independent journalism like this. Sign up to be a Frontier member.

“I have never seen this kind of case before. Myanmar Carlsberg ran a promotion – ‘buy three cartons of Yoma Beer and get one carton free’ – but they neglected to give us the free cartons,” he said, accusing the company of failing to adhere to business ethics.

Myat Hmwei Trading Company, which was formed in 2002, distributes cigarettes, liquor, wine and beer, to shops and beer stations in Yangon. It stopped buying products directly from Myanmar Carlsberg in January, two months after the dispute began.

Ye Tun said his company had sent at least six emails since April asking for the cartons of beer, and requesting a meeting with Myanmar Carlsberg’s managing director Mr Christoph Vavrik to discuss the issue. But he said that Vavrik refused to meet him.

Myanmar Carlsberg has rejected Myat Hmwei’s accusation. Vavrik told Frontier by email on August 26 that Myat Hmwei had submitted inaccurate and varying computations and unfounded sales reports to request more promotional products than it was due.

“As any reputable and ethical organisation would do, we rejected their demands and offered instead to deliver what was due according to the official records. But they never replied to this offer,” he said.

Ye Tun claimed that Myanmar Carlsberg had only offered to reimburse a small amount, which was less than the amount due.

“That’s why we did not reply to them. We have evidence and will submit this evidence to the court. If we really made an inaccurate claim, they should explain this [to us] officially,” he said.

Vavrik said he was confident in Myanmar Carlsberg’s position and said he strongly believed that the company would win the case.

“We are ready to face these false allegations and defend ourselves in court. We trust that the court will see the merits of our case and dismiss it altogether,” he said.

He said the company would take all necessary legal action against Myat Hmwei to defend itself against the false allegations, and the harassment of Myanmar Carlsberg and its employees.

Myanmar Carlsberg was established in 2013 under a partnership between Carlsberg and Myanmar Golden Star (MGS) Company, which is controlled by tycoon U Thein Tun. The company opened its $100 million brewery in Bago Region in 2015 and produces Carlsberg, Yoma, Tuborg and Black Eagle Stout. According to its website, it is ranked fourth for market share in Myanmar.

Ye Tun of Myat Hmwei said he met Thein Tun to discuss the problem before deciding to file the complaint against the Myanmar Carlsberg staff.

He said Thein Tun told him that he was not worried about the issue, because it did not concern him. “He [Thein Tun] said that the management team was responsible for this case,” he said.

Correction, September 2: This article has been amended at the request of U Ye Tun to reflect the fact that the sales promotion was for Yoma Beer, not Tuborg. In the interview, U Ye Tun had said that his company was owed Tuborg beer. The article has also been updated to reflect that the complaint to police relates to beer worth K200 million, not the full K600 million.   

By Ye Mon

By Ye Mon

Ye Mon started as a reporter at Pyithu Khit news journal in 2011. Prior to joining Frontier, he worked as a reporter at the Myanmar Times and on the DVB English team.
Share on facebook
Share on twitter
Share on email

More stories

Latest Issue

Stories in this issue
What Kyaw Myint’s downfall tells us about doing business in Myanmar
Kyaw Myint is just the tiniest tip of a very large iceberg of criminal activity in Myanmar’s business community, but as long as you steer clear of politics you’re unlikely to get caught.
Myths, militias and the destruction of Loi Sam Sip
Activists in northern Shan State have been fighting for years to protect a culturally and environmentally important mountain range but face opposition from Tatmadaw-aligned militias – and a company linked to the speaker of Myanmar’s national parliament.

Stay on top of Myanmar current affairs with our Daily Briefing and Media Monitor newsletters

Our fortnightly magazine is available in print, digital, or a combination beginning at $80 a year

Sign up for our Frontier Fridays newsletter. It’s a free weekly round-up featuring the most important events shaping Myanmar