Tue 17 Jul 2012
Filed under: Business / Trade
Fast food giants Kentucky Fried Chicken (KFC) and McDonalds could soon be on the menu in Burma, industry experts said on Monday.
The US eased sanctions against the impoverished country late last week, days before a massive delegation of America’s biggest business names visited Rangoon over the weekend to explore investment opportunities.
Anthony Nelson, associate director of public relations at the US ASEAN Business Council, told reporters there was mutual interest between American fast food giants and the Burmese public.
“I know that’s something where there’s a lot of interest inside Myanmar [Burma],” Nelson said when asked by local reporters if KFC would soon be making it Burmese debut.
“Some of those restaurant companies are looking at it – I can’t comment on any particular one – but I know that’s something that’s being looked at,” he told reporters at a press conference inside Rangoon’s Sedona Hotel on Monday.
Soft drink giants Coca Cola and Pepsi Cola have expressed their interest in returning to Burma and both beverage brands are already widely available in various local supermarkets.
However, not everyone welcomes the influx of American investment and cultural influence.
“The biggest problem we expect is the non-technical joint ventures or the FDI investments that come in, like Coca Cola,” said Ashoke Kumar Murarka, local business owner and chief executive officer of Tropical Biotechnology Limited.
“KFC and McDonalds absolutely should be restricted – it doesn’t fit into our culture and it’s unhealthy,” said Murarka.
“That’s something that our country does not need,” he said, adding significant investment in energy, agriculture, processing and manufacturing industries was required to stimulate Burma’s economic growth.
But ultimately, the Burmese consumer will make the final decision on what products will be popular, according to Jared Bissinger, a PhD candidate at Australia’s Macquarie University who is studying Burma’s economy.
“Consumers around the world choose companies like Coke and KFC because they like those products,” said Bissinger. “These people have other choices about where to eat and drink but make their choice based on price, taste, or some other factor that they value.
“Competition in food and beverage industries expands consumer’s choices (increasing their welfare), helps bring down price and generally improves quality,” said Bissinger.
He said the role of government should not be to restrict these consumer products but to protect local companies by ensuring an appropriate degree of regulation regarding competition.
“Prohibiting competition and choice in the long run is not the answer, and won’t help companies from Myanmar learn, grow, and compete domestically or internationally,” said Bissinger said.
Nelson said Burma’s population of about 60 million people was an untapped market and the former pariah state offered many different foreign investment opportunities.
“For a lot of companies, this is a blank slate. So it’s a chance to come in and look at what’s missing and how multinational companies might fit into the network that’s already there,” said Nelson.
While there’s definitely a rush of interest, these are still early days for US investors, Nelson said, adding significant US investment could take years.
“The scale of what US companies do isn’t just something that can appear overnight,” he said.
“They make great big investments in a lot of cases so they’re going to start looking, but a lot of the large investment that might come is still further down the road.”
US business heavyweights Chevron, ConocoPhillips and ExxonMobil, along with companies in other sectors such as Dell, FedEx, Google, MasterCard, Dow Chemicals, Procter & Gamble and Time Warner participated in the US/ASEAN Business Council’s first ever official trip to Burma last weekend.
-Kate Kelly is a pseudonym for a journalist working inside Burma.