Businesses owned by the family of deceased crony Thein Tun and their foreign partners Heineken, Carlsberg and ThaiBev are paying huge sums in tax to the illegal junta for their drink businesses, filings released by Distributed Denial of Secrets show.  

The tax payments aid the junta as it wages a campaign of terror against the people of Myanmar, increasingly relying on its air force to carry out indiscriminate attacks. On April 11, the junta launched air strikes against people gathered at an event in Pazigyi village, Sagaing, killing at least 168 people, weeks after the UN Human Rights Council passed a resolution that called on the Myanmar military to immediately cease all air strikes. Since its coup attempt, the military has launched indiscriminate air strikes across Myanmar. An October 2022 air strike against a concert in Kachin State killed over 80 people. Large tax payments from the drink giants help the junta buy arms, fuel and equipment and pay soldiers, supporting ongoing war crimes and crimes against humanity.  

Thein Tun’s Myanma Golden Star Group, which he controlled with his son Thant Zin Tun until his death in 2022, is the Myanmar partner of Carlsberg. Carlsberg in Myanmar additionally produces Tuborg, Yoma and Black Eagle beer. Thant Zin Tun's son, Daniel Nay Min Tun, has been a director of Myanmar Carlsberg since July 2018 and became CEO of Myanma Golden Star Group in July 2018, according to his LinkedIn profile.

Myanma Golden Star is also the domestic partner of the LOTTE Chilsung Beverage, a subsidiary of South Korean corporation LOTTE Corporation for the manufacture of soft drinks Pepsi, 7UP, Mirinda, Sting, Star, Quench and Crusher, and Popa Aqua bottled water.  

Thein Tun’s daughter, Mar Mar Tun and son-in-law, Aung Moe Kyaw, are the local partners of Heineken and Thai Beverage (ThaiBev). Heineken in Myanmar also produces Tiger, ABC Extra Stout, Bawdar and Regal Seven beer, while the ThaiBev controlled Grand Royal Group produces Grand Royal whiskies, Royal Special gin and vodka, and bottles MacArthur’s, a blend of whiskies imported into Myanmar from Scotland.

The Payments

An analysis of available tax filings from October to December 2021 show that Heineken, Carlsberg and ThaiBev subsidiaries paid 49.9 billion kyat in Specific Goods Tax (SGT) alone to the military junta, equivalent to US$27.6 million based on average exchange rates from the Central Bank of Myanmar, which is illegally under junta control. SGT is a tax on the production and import of alcohol and other products that is applied to beer at a rate of 60% and a variable rate for spirits, depending on the price level.

The biggest taxpayer in the group is Grand Royal Group, which is controlled by ThaiBev, a corporation listed on the Singapore stock exchange. ThaiBev’s Myanmar subsidiary paid 25.9 billion kyat in Specific Goods Tax alone to the junta in the fourth quarter of 2021, equivalent to over US$14 million. In the same period, Heineken in Myanmar paid the junta 16.8 billion kyat (US$9.3 million) in SGT and Carlsberg’s subsidiary in Myanmar paid the junta 7.1 billion kyat (US$3.9 million) in SGT.

ThaiBev, Heineken and Carlsberg companies also pay commercial tax and income tax to the junta, which totalled 12.6 billion kyat in the period, equivalent to US$7 million.

Spread across a year, ThaiBev, Heineken and Carlsberg companies in Myanmar could be paying as much as 250 billion kyat or US$155 million in taxes to the junta.

While 2021 records for LOTTE MGS Beverage were not available, 2022 filings for the first quarter show the company paid 1.3 billion kyat in commercial and income tax, equivalent to over US$600,000 on revenues of 18.3 billion kyat (around US$8.7 million). LOTTE MGS Beverage products are not subject to SGT.

ThaiBev is responsible for further tax payments to the junta through its subsidiary Fraser & Neave, which produces Chang Beer through Emerald Brewery Myanmar Limited, a joint venture established with Than Lwin Aye Yar Industrial Production & Construction Company of the crony Shwe Than Lwin group.

Illegal taxes

Taxes are being paid according to rates set by the State Administration Council (SAC), which is sanctioned by the US, UK and EU. SAC has unlawfully issued yearly tax laws, and illegally controls the Internal Revenue Department, which collects tax payments. SAC’s 2023 tax law increases SGT for liquor.  

Tax payments to the junta go against Pillar Three of the investment guidance of the National Unity Government: “Withhold payment of all taxes and other fiscal obligations to military-controlled authorities and instead discharge such payments to an escrow account”.  

In addition to taxes, LOTTE Corporation subsidiary LOTTE Hotels & Resorts is responsible for annual lease payments to the Myanmar Army’s Office of the Quarter Master General, through its investment in a hotel and serviced apartment development with POSCO International. The project operates under a build-operate-transfer deal that will also provide the Myanmar military with a lucrative future asset.  

By financing the junta, major international beverage corporations are breaching their responsibilities under the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises to identify, mitigate and remedy negative human rights impacts, and to responsibly disengage if they cannot end their links to severe human rights violations. By failing to act, the companies risk deepening complicity in the junta’s atrocity crimes, which are supported by their large tax payments.

When asekd about its tax payments to the junta and its human rights due diligence, Heineken responded, “Our main priority in Myanmar continues to be the safety and livelihoods of our people, their families and those connected to our business. By maintaining our presence, we are living up to our long-term commitment to our employees and the communities related to our business.”

“We have done our due diligence and are assured that our Myanmar business has no ties with the military. However, as a responsible business under local and international standards, we are obligated to pay taxes in all markets we operate in. Fulfilling our obligations in Myanmar does not represent our support to the government in question.”

Carlsberg responded, "As a company, we are subject to local laws in all the markets we operate in. This means that, like any other company, we are obliged to pay taxes and duties, whether in Myanmar, Denmark or any other market."

“Our human rights programme follows the UN Guiding Principles on Business and Human Rights (UNGP). This work is ongoing and includes concrete efforts to prevent, address and remedy human rights abuses connected to our value chain.”

“We have a human rights policy with global applicability, and we conduct human rights due diligence to identify the areas of human rights that could be adversely impacted by our value chain, which is a necessary step to be able to identify adequate measures to address such impacts.”  

"In Myanmar, we started conducting a series of enhanced human rights due diligence activities in 2022 to understand the operational environment better. This work is being done in conjunction with external parties and involves input from a wide variety of stakeholders with expertise in human rights and the local environment. The outcome of this process will be communicated in our global ESG report when finalised.”

ThaiBev and LOTTE did not respond to questions from Justice For Myanmar.

Calling time on drink giants

Justice For Myanmar calls on ThaiBev, Heineken, Carlsberg and LOTTE to follow the guidance of the National Unity Government and their international human rights responsibilities, and end payments to the military junta.

International investors, including pension funds and their asset managers holding shares in Heineken, Carlsberg, ThaiBev and LOTTE also have a responsibility under the UN Guiding Principles and the OECD Guidelines to use their leverage to convince their investee companies to act responsibly, and to divest from those companies if they do not act responsibly. If the asset managers do not do so, the OECD Due Diligence Guidance for Responsible Business Conduct indicates that they risk deepening their relationship to and responsibility for the severe human rights violations the Myanmar junta is committing with revenue from the sale of drinks.

Heineken’s biggest shareholders include FEMSA, GQG Partners, Morgan Stanley, The Vanguard Group and Norway’s Oil Fund.

Carlsberg’s biggest shareholders include Capital Research & Management, Thomburg Investment Management, Norway’s Oil Fund, The Vanguard Group and DWS investment.

ThaiBev’s biggest shareholders include the Sirivadhanabhakdi family, FIL Investment Management, Vontobel Asset Management, Banque de Luxembourg Investments and Norway’s Oil Fund.  

LOTTE’s biggest shareholders include the National Pension Service of Korea and First Eagle Investment Management.

Drinking with the generals

Heineken and Carlsberg both have a controversial history in Myanmar, pursuing investment under the previous military junta. In 1996, the two companies exited brewery projects under pressure from activists and a global boycott. However, Carlsberg continued to pursue business with the then junta, entering an apparent secret partnership with military conglomerate Myanmar Economic Corporation (MEC) and Myanma Golden Star to establish Dagon Beverages.

Leaked documents released by Distributed Denial of Secrets reveal that Carlsberg may have used a proxy company, Brewinvest (Bermuda) Ltd, to enter into a joint venture agreement with MEC and Myanma Golden Star in 1997. Brewinvest (Bermuda), which appears to have been owned by the Carlsberg associated company Malaysian Mosaics Berhad at the time of the joint venture agreement, sold its shares to MEC in 2005 for US$4 million, and had done business in possible breach of EU sanctions. The leaked share transfer document lists Derek Ian Cook as transferor for Brewinvest, who at the time was director of Carlsberg in Thailand. The witness is Jesper Bjorn Madsen, Carlsberg Asia’s Senior Vice President.

MEC’s website lists the former Dagon Beverages joint venture with Brewinvest (Bermuda) and discloses “installation” by Danbrew, which was then a fully owned brewery-related services subsidiary of Carlsberg.

Under the partnership with Carlsberg, Dagon Beverages formerly produced SKOL beer, a brand that Carlsberg still holds rights to.

Regarding its past business with MEC, Carlsberg responded, "Concerning the period 1997 to 2011, we take these allegations very seriously. We have therefore launched an internal investigation to uncover all facts related to that period and the actions related to Myanmar. We will come back with the conclusions of the investigation when finalized."

Myanma Golden Star sold its Dagon Beverages shares to MEC in 2009, but appears to have continued to partner with MEC in Dagon Dairy, a business that produces condensed milk.

In 2013, Thein Tun and Thant Zin Tun entered into an agreement with the Myanmar Army’s Office of the Quarter Master General to develop a resort on Inle Lake under a build-operate-transfer contract, according to leaked investment commission data. Following the military’s coup attempt, the Office of the Quarter Master General was sanctioned by the US, UK, EU and Canada.  

Paramount Resort provides funds to the army through land lease fees as well as a lucrative future asset that the army can use to generate revenue, showing a deeper complicity of Carlsberg and LOTTE’s partners in the Myanmar military’s genocide, war crimes and crimes against humanity.

Regarding MGS business with the Myanmar military, Carlsberg responded, “According to the due diligence we conducted with the assistance of an independent third party in 2021, there have been no direct commercial links to the Myanmar military or military-controlled companies since 2012 by our partner.”

Responses

Carlsberg (August 31, 2023)

Heineken (April 17, 2023)

Carlsberg (April 19, 2023)

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Update (April 20, 2023): Description of Myanma Golden Star Group updated to include Daniel Nay Min Tun, son of Thant Zin Tun, who became CEO in July 2022. Description of Emerald Brewery updated to note that it was established with Than Lwin Aye Yar Industrial Production & Construction Company of the crony Shwe Than Lwin group.