Pepsi Still Popular in Burma Despite Boycott Pressure
Aug. 26, 1996
RANGOON, Burma (AP) _ Thida Thein was thirsty. As she squatted under the merciless Rangoon sun, waiting in a crowd of thousands for the regular Saturday speech by Burma's opposition leader Aung San Suu Kyi, she said she wanted water.
``No Pepsi,'' Thida Thein insisted as sweat trickled onto her peach-colored collarless jacket, the uniform of Suu Kyi's political party.
``Pepsi helps the SLORC,'' explained a young woman kneeling next to her, referring to Burma's military government.
Pepsi's business in Burma _ a country ruled by a regime that has brutally crushed democratic opposition and is accused of widespread human rights violations _ garnered the company $8 million in profits during 1995.
It also brought a windfall of bad publicity. With the battle cry that Burma is the South Africa of the '90s, students on 75 college campuses across the United States launched a campaign of pressure, protests and boycotts to force Pepsi and other companies to divest their holdings in Burma.
The pressure led Pepsi to sell its 40 percent stake in its Burmese bottling plant in March. Apparel makers Columbia Sportswear, Eddie Bauer, Osh Kosh B'Gosh and Liz Claiborne also bowed to the protests and divested, while the oil company Unocal is resisting.
But activists said Pepsi's pullout was a sham. The company had shifted instead to a franchise agreement with its Burmese partner, Thein Tun, supplying him with syrup and use of the Pepsi name.
``We don't think that is acceptable,'' Suu Kyi told The Associated Press during an interview in May. The 1991 Nobel Peace Prize winner wants Pepsi to completely pull its products out of Burma.
Keith Hughes, a Pepsi spokesman at the company's Purchase, N.Y. headquarters, said ``We have no employees or assets in Burma today.'' Asked about the company's franchise agreement, he said, ``We've announced our intention to honor our contractural agreement with that bottling operation.'' He declined to comment on what the company might do at the end of the contract period.
Suu Kyi, who enjoys widespread support inside Burma, has urged foreign investors to refrain from doing business in her country until the military begins a true dialogue with the democrats.
But aside from Suu Kyi's party members, has a Pepsi boycott actually taken hold inside Burma?
``No,'' said Nyi Oo, an artist and former member of Suu Kyi's party. ``The people don't understand the connection between Pepsi and the government because most are uneducated.''
While advocates of investing in Burma like to tout the country's literate work force, a United Nations study said that somewhere between 65 percent and 75 percent of Burmese don't get past the fifth grade.
So from dingy shops to chic restaurants, Pepsi is popular nearly everywhere in Burma. Trucks with cases of empty Pepsi bottles can be seen rattling down Rangoon's potholed streets, glass jingling like coins in a cash register.
While Burma may be just a drop in Pepsi's bucket of profits, Pepsi is the fountain of the wealth for Thein Tun, the company's Burmese partner.
The high-school educated, grandfatherly businessman is now a millionaire, something unheard of in Burma's backward economy just a few years ago when Gen. Ne Win's socialist isolationism kept most foreign companies out.
Pepsi is by far the biggest money maker in Thein Tun's empire of 14 companies that includes distributorships for cars, Chivas Regal scotch whisky and Procter & Gamble products.
He's also known as a philanthropist, claiming that 25 percent of his profits goes to charity.
Thein Tun didn't respond to requests from The Associated Press for an interview, but he told a local business magazine earlier this year that the key to his success has been his thirst for knowledge.
``Burmese businessmen don't know anything about the global economy,'' he said. ``Even those who are doing the manufacturing or trading are ignorant of events that can suddenly affect them.''
With news strictly censored in Burma, it isn't clear when Thein Tun became aware of the growing grassroots movement in the U.S. for divestment.
This month, public pressure in Europe cost him another key foreign partner: Danish beer maker Carlsberg jumped ship on a joint venture for a brewery in Burma. Holland's Heineken followed shortly after, although it was not associated with Thein Tun.
Democracy activists say the real key to Thein Tun's success is that he is one of the generals' cronies. But with the military taking an interest in most major business arrangements, ambitious local entrepreneurs have little choice but to deal with the regime.
The military's grip on Burma and its business was apparent in June when Thein Tun led a government-sponsored mass rally in Rangoon. Participants in such rallies have said they were required to attend.
As tens of thousands of people listlessly chanted pro-military slogans, Thein Tun vigorously urged them to crush enemies of the state, internal traitors and foreign destructionists.