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Nestlé to close factory, office in Myanmar

<i>Sai Aung Main/AFP/Getty Images</i><br/>Nestlé will close its sole factory and head office
AFP via Getty Images
Sai Aung Main/AFP/Getty Images
Nestlé will close its sole factory and head office

By Heather Chen, CNN

Nestlé has announced that it will close its sole factory and head office in Yangon, Myanmar’s largest city, as it switches to a more “sustainable” business model amid ongoing turmoil in the country.

Myanmar has been rocked by violence and instability since 2021 when a military coup ousted democratically elected leader Aung San Suu Kyi and her government. Thousands have been killed nationwide since the coup began.

The economy has collapsed, with severe shortages of food, fuel and other basic supplies.

“We will do all we can to support everyone affected by this decision,” a Nestlé spokesperson told CNN Tuesday in a statement. “Consumers will still enjoy the same Nestlé brands imported from Thailand, Malaysia and the Philippines.”

A number of foreign companies have exited Myanmar since the coup began, including oil giants TotalEnergies and Chevron and Norwegian telecoms operator Telenor.

Total started operating the offshore Yadana gas field in Myanmar in 1992, and was the biggest shareholder in the project. About 70% of the gas was exported to Thailand. Chevron had owned a smaller stake in Yadana.

Both companies announced in January 2022 that they were withdrawing because of the deteriorating situation in the country

Japanese beer maker Kirin cut ties with its local brewing partner and left Myanmar days after the junta seized power.

“Nestlé started distributing our products in Myanmar in 1991 and expanded our presence in the country,” the spokesperson said. “For some time now, we have been looking at how we can make the Nestlé Myanmar business sustainable [and] recently conducted an evaluation on the best approach to do so.”

“The evaluation concluded that transitioning to a distributor model makes most sense in the current economic situation,” the person added, reiterating that the company was not closing its Myanmar business.

The Swiss conglomerate is the world’s largest food and beverage company and makes products like Nescafé coffee, KitKat chocolate bars and the popular chocolate malt beverage Milo.

It recently announced price increases amid global inflationary pressure that has impacted food and commodity prices.

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