Category Archives: Bangladesh 2009-12

Legendary Australian winemaker visits Myanmar

Published in Mizzima Business Weekly on 28 November 2013

Bill Hardy
Bill Hardy

Bill Hardy, the fifth generation descendant of legendary Australian winemaker Thomas Hardy, expressed enthusiasm for Myanmar’s wine market during a visit to Yangon last week.

Speaking at Traders Hotel on November 13, Mr Hardy said that his forefather, who created the first Hardys wine back in 1853, would have been “bloody delighted” to see Hardys on the table at a gala dinner in Myanmar.

“It was his intention to create wines that would be prized all over the world – this would be a proud moment for him,” Mr Hardy told Mizzima Business Weekly.

From its modest 19th century beginnings on a start-up vineyard in Australia, Thomas Hardy and Sons went on to become the country’s largest winemaker. It remains the largest winemaker by volume in Australia and the United Kingdom and in 2011 the family-run company was sold and renamed “Accolade Wines”. Accolade Wines sells some of the world’s most famous wine labels in 80 different countries and its eponymous Hardys label was judged the world’s second strongest wine brand in 2008, according to The Adelaide Advertiser.

Mr Hardy was born in 1950 and joined the family business when he was in his early twenties. He later went on to study winemaking at the University of Bordeaux and came out dux of his year. After his return to South Australia – where Thomas Hardy first established the business, he served as president of the Australian Society of Viticulture and Oenology and Chairman of the McLaren Vale Winemaker’s Association.

Before retiring as a winemaker, the self-confessed red wine fan completed 26 vintages in Australia and France, and today serves as Hardys’ brand ambassador. Last year marked his 40th year of service to the company.

With such strong credentials, local winemakers and consumers in Myanmar will be pleased to learn that he “many heard great things” about Myanmar wines during his flying visit to the country, citing Red Mountain and Aythaya in particular.

Mr Hardy said that whilst Shiraz is by far the most popular wine in Australia (where wine comes a close second in popularity to beer, according to the Australian Bureau of Statistics), “In Asia, the moscato wine has been introduced with great success.”

Moscato wines are made from muscat grapes, which are thought to be the oldest domesticated grapes in the world and range in colour from white to a near black.

“It’s a very fruity variety of wine, with strong grape aromas. It sounds funny when I mention the word ‘grape’ because we almost never use that word when discussing the aroma of wines. That’s ironic, considering every wine comes from grapes. The moscato wine isn’t exactly a sparkling wine, but it has a few bubbles to excite the pallet. It’s also quite low in alcohol – while most table wines have an alcohol content of 12 – 14%, moscato is usually 8%. It works well with desserts,” he said.

Accolade Wines Sales Manager Rachel Meisner, who is based in the regional Singapore office and manages sales across 10 countries, told Mizzima Business Weekly that no reliable statistics on wine culture exist for Myanmar.

“It’s certainly an area for improvement,” she said, adding that Malaysia, for a variety of reasons, also has a big gap when it comes to information about wine consumption.

However she said consumer research about wine is a relatively new concept across the world.

“In general, wine companies didn’t conduct the sort of market research campaigns a cosmetics company such as L’Oreal spends billions on. The traditional approach was that the winemaker used their superior knowledge to develop the best wines – that’s why the winemaker is so important historically. But as companies are becoming globailised and expanding to a bigger audience, they are beginning to make an effort to tailor their wines to local tastes, particularly at the entry level. That consumers’ opinions are becoming more valued is a big change in the global wine industry.”

Nevertheless, Ms Meisner said that the highest quality wines remain “the baby” of every individual winemaker.

“We would never ask consumers what would they would like in a HRB bottle [Hardys’ top end lines] because the winemaker is the only expert at that level.”

Ms Meisner explained that in a country such as Myanmar, where most people remain unfamiliar with wine, there is often a preference for less alcohol and more sugar.

“That’s why moscato is has been such a rocket success across Asia, because it’s sweet and fruity and contains almost no tannin. Very often people don’t know what they’re reacting to in a wine, but it usually turns out to be the high alcohol content that they dislike.”

However whether this reasoning would apply to Myanmar – a nation of whisky lovers – remains to be seen.

Whilst it might seem logical to assume that white wines are more popular in tropical climates than a heart-warming, room temperature glass of red, Ms Meisner said the opposite is true.

“In countries with a long history of wine consumption [commonly the “Old World Wine” nations of Europe] a white wine is chilled in the fridge to make it more enjoyable. However in terms of wine consumption in Asia, it often begins with the middle classes. The reasons why someone believes they will enjoy wine usually aren’t related to what will go well with a meal. It’s about being perceived as sophisticated, having European tastes and embracing European products. In Asia, 85% of Accolades’ wine sales are red wines.”

Myanmar’s beer battleground

Published by The Bangkok Post and Democratic Voice of Burma on 11 November 2013

A legal dispute between a Thai-owned conglomerate and its military-linked local partner over Myanmar Brewery Ltd. is shaping up as a crucial test for foreign investment in Myanmar.

The dispute between the Myanmar Brewery partners of nearly two decades arose following the takeover of Fraser and Neave this year by companies controlled by Thailand’s richest man, Charoen Sirivadhanabhakdi.

Although information about the confidential arbitration is scarce, analysts claim the case is centred on Myanmar Economic Holdings’ assertion that it should have been given an option to buy Fraser and Neave’s 55 per cent stake in Myanmar Brewery before ThaiBev’s Mr Charoen.

Fraser and Neave released a statement shortly after receiving the arbitration notice in August that it will “vigorously resist” claims that it broke the terms of the joint venture agreement.

Whilst Myanmar Brewery does not publish separate financial results, The Internal Revenue Department listed it as the country’s largest commercial taxpayer for the 2012-13 financial year.

Foreign investors will be keeping a close eye on the dispute: if the arbitration is seen to be handled unfairly, many will likely reconsider investing in South East Asia’s last frontier market, where joint ventures with a local partner are compulsory across many sectors.

According to an analyst who spoke to The Bangkok Post on condition of anonymity, “Partnering up with a military investment vehicle like UMEHL is a double-edged sword. Of course, having UMEHL on your side means having easier access to permits, land and so forth – but it also leaves [a foreign company] vulnerable in case of disputes.”

However the analyst said that the large amount of attention the case has already garnered internationally could be a game changer in a country that formerly operated with impunity in its business deals and human rights records.

“Suddenly there is more international attention on the case than I think UMEHL would have wanted,” the analyst said.

“It is shaping up to become a litmus test of the regime’s commitment to the rule of law, so perhaps UMEHL won’t be able to trump through their will as they would have in the past.”

Meanwhile, Mr Charoen’s former business partner, Carlsberg of Denmark, held an opening ceremony for its second largest expansion programme in Asia on October 21, when it opened a factory in Bago.

Myanmar Carlsberg Co., Ltd. is a joint venture between the Carlsberg Group and the country’s top selling beverage company, Myanmar Golden Star (MGS).

According to pundits, not every joint venture in Myanmar will end acrimoniously, however a high degree of caution is necessary, particularly as Myanmar’s waters are largely untested.

“I wouldn’t say that you shouldn’t do joint ventures in Myanmar, but this case highlights the need to do your homework properly and know who you are going to bed with,” the analyst said.

According to Myanmar Carlsberg managing director Daniel Sjogren, the factory will create more than 500 jobs on the 54-acre site that is less than 90 minutes away from the commercial capital of Yangon. Bago will also become home to a major new international airport in 2016.

“The potential for growth in the beer market in Myanmar is promising. It has one of the lowest beer per capita consumptions in Asia, with only 4 litres per person in a country with a population of over 60 million,” Thant Zin Tun, Board Director of Myanmar Carlsberg, said in a press release dated October 11.

Marita Schimpl, Head of Marketing Research at Myanmar Survey Research told The Bangkok Post that, “Most people prefer whisky, because it’s much cheaper than beer. However we would expect to see beer consumption increase as incomes rise in the next few years.”

Myanmar has a host of low-end, low cost rums and whiskys available on the market. According to May Lwin Oo deputy general manager of Victory Myanmar Group, which owns Mandalay Rum, a product that boasts a 75 percent market share of rums and whisky and sells more than 15 million litres a year, “Sales figures [of Mandalay Rum] have not been affected by any increase in beer consumption.”

In addition to the lifting of most sanctions imposed by the US and EU, Myanmar’s beer market has also seemingly overcome another major stumbling block for investors: illegal imports of beers.

According to Thailand’s Tak Chamber of Commerce, monthly imports from Thailand to Myanmar through Mae Sot were estimated at three billion baht (US $100 million). Others said this figure was conservative.

For 12 years, 32-year-old “Phoe Nge” (a nickname he uses) made a living by transporting imported beers such as Singha and Chang to a warehouse in Yangon from Myawaddy, Myanmar’s border town.

The warehouse, which employs four workers on a commission basis, then sold the beer to outdoor pubs and shops, often at a lower price than local beers such as Myanmar Brewery’s Myanmar Beer fetch.

“When I reached Myawaddy I’d make a call to Myanmar nationals living in Mae Sot, and 30 minutes later the beer would arrive,” he said.

Phoe Nge usually transported 700 boxes of beer during the four day round trips.

“I never paid tax on beer during the military government’s regime – I just paid a bit of money under the table. It wasn’t problem,” he shrugged.

“But this new government says ‘You can bring in beer, but you have to pay tax on it.’ The government is bringing in containers of beer and it’s cheaper than I can get it for now.” In September 2012, Phoe Nge made his last trip ferrying beer as his warehouse boss switched to the electronics trade.

“It’s still possible to make a decent profit on rice cookers and so forth after paying tax,” Phoe Nge said.

He said there are still a handful of people importing tax free beer from Mae Sot: these black market traders avoid the Myawaddy Industrial Zone by taking one of two roads on either side that were built by Shan rebels.

One gate is manned by the Democratic Karen Buddhist Army (DKBA), who Phoe Nge said do not ask for tax to be paid. However the Shan rebels, a different ethnic group, demand a payment of half the government’s rate of tax.

“But it’s very dangerous to go along these side roads – I could get shot,” he said.

Watch that space: Gill Pattison of The Strand’s River Gallery and River II

Published in Mizzima Business Weekly – Issue 44, 31 October, 2013

Gill Pattison is the owner and curator of The River Gallery at The Strand Hotel and the newly opened River II, which are located in close vicinity of each other in downtown Yangon. She shares a decade of experience in Yangon’s contemporary art scene with Mizzima Business Weekly.

Gill Pattison at River Gallery
Gill Pattison at River Gallery

Why did you come to Myanmar?

We came to Yangon in 2002 – on a lark really. My husband and I had been living in Hong Kong for a decade, both with very busy jobs. After really enjoying our first trip, we decided to come and live here for a couple of years, do some general things and then move on. Yet here I am, 10 years later…

Do you have an arts background?

I had no relevant experience or qualifications – except that I’d looked at a lot of paintings. I’ve always enjoyed looking at art: I would rather go round art galleries than buy shoes. I think I am very affected by certain kinds of paintings; it’s almost a physiological thing.

How do you come to acquire a gallery at The Strand?

I had been looking around for a place to have an art gallery, and I thought The Strand would be a good location with all the people millingabout… Although in those days, there weren’t so many people, that is. When I saw this space, which was at the time being rented out to a couple of businesses [who subsequently vacated], I could easily see how it would look after restoring the floor, taking out the false low ceiling and removing the cubicles and partitions. We also knocked a hole in the wall and put in a Myanmar-styled arch entrance. When I first saw the space it was really dreary, but it’s scrubbed up really well. River II was the same – it didn’t need much done to it.

When you first set up the River Gallery, tourists were few in number and sales must have been far more infrequent than they are today. Was it a labour of love?

I think the gallery business in general is a labour of love: unless you’re Charles Saatchi or one of those big names. It’s a difficult business as well as polarising – the big galleries are getting bigger, becoming corporatised and turning into very substantial businesses. There are opportunities for small, niche galleries that focus on particular artists, but the middle ground is becoming a dessert.

Financially, there were a series of events that made the business a difficult one. There was the monk’s protests of 2007, which was followed the next year by Cyclone Nargis, and then the financial crisis of 2008-09. Now, with the “Myanmar Spring,” there are certainly a lot more people around who are interested in the arts.

Has the introductions of ATMs had a huge impact on sales at your galleries?

Not so much for me, because I’ve always been able to take credit cards. The transactions took place offshore, through an offshore company. I was very fortunate in that regard, because the lack of ATMs was a real dampener on business. However I would say that art is more of an impulse purchase – I don’t know that there’s many people who come on a trip to Myanmar and think, “I’m going to buy a painting.” What we do find is that the people who come are so enchanted by Myanmar that they are attracted to local products, including art. People want to own of something that perhaps reminds them of this country, though we’re not selling particularly touristy paintings and they’re not cheap either. So it’s not a case of just getting a souvenir. But while I do talk to people and try to understand what appeals to them, one’s emotional reaction to a piece of art is something we don’t easily have the language to express.

What appeals to you as a curator?

I have very particular tastes, which all the artists know about [laughs]. For example, I am not very fond of particular shades of green. I have artists who come here with a painting and say, “Ms Gill, I know it’s green, but please look at it…”

The work has to be executed very skilfully – I have to be able to understand what the creative idea was and then to see that it has been executed well. This requires a high level of technical expertise. Another thing I look for is seeing something that I haven’t seen depicted in the same way before. What I find is that the paintings that appeal are those that quite often take a traditional subject, but the artists has given it a contemporary twist; they’ve done something that makes me see the subject differently. If the purpose of art is to banish the banal and give you that little jilt of recognition, the “twist” is essential.

Do you see a lot of paintings of monks and pagodas and feel frustrated by recycled ideas?

Well, my door is always open to artists, so I have many coming in to show me work. However most of them aren’t ready for River Gallery. There’s a lot of work that takes traditional subjects and paints in quite a traditional way. That’s not what I’m about. I’m trying to look for the new and different.

On the other hand, I have great admiration for Myanmar artists because they’ve operated almost in a vacuum. That’s changing now, but for 40 years the country was cut off from the global art market. There wasn’t much access to the internet, there were no art books or magazines, no TV shows about art. The art schools were starved of resources and art history classes didn’t go much into the 20th century, let alone the 21stcentury. So the artists who succeed here have to be very clever, persistent and talented.

Although there is now a far higher degree of artistic freedom in Myanmar, what more does the arts sector need to thrive?

There are lots of things needed to make a healthy, thriving, “art ecosystem”. We lack many components, and one of them is scholarship on Myanmar art. We don’t have the art writers and the art criticism, apart from one individual I know of, Nathalie Johnston.  But we almost never see work like hers. We need art professionals to be commentating on art, supporting and developing art, and making connections. In that regard, it’ still so limited here.

You also work part-time heading up Proximity’s agricultural microfinance business unit. Do you consider yourself a workalholic?

No – I’m too lazy! I get home at night and talk to my daughter and later I think ,“I should do a few more hours of work.” But I don’t. Both my jobs are really interesting. [Microfinance] is actually a great contrast and counterpoint to the art business. I love them both more because I do them both – if that makes sense? Yesterday, for example, I was at Proximity and talking to farmers, preparing training, working out the loan program and looking at the numbers. It’s all very busy and corporate and then I come and sit here and look at beautiful paintings and talk to interesting people.

Do you have any hobbies outside work?

My family is tennis mad. We play the round-robin tournament at L’Opera, which starts in October and runs until March. This is the seventh year it’s been running. The people there are fabulous and welcoming and it’s really fun.