METRO, a German-based international wholesale company, has announced that it will cease its foodservice distribution business in Myanmar due to the volatile investment and business environment in the Southeast Asian country. METRO’s decision comes after months of deliberations and serious consideration of the current situation in Myanmar. METRO notes that numerous uncertainties continue to prevail in the country, including political instability, a deteriorating infrastructure, and a high level of currency devaluation. The company also points out that its foodservice distribution business does not align with METRO’s core values and strategic objectives. “We have been following very closely the events unfolding there for some time now and have come to the conclusion that it is not in our best interests to continue our foodservice distribution business in Myanmar at this time,” said METRO CEO Hartmut Seifert. In light of this decision, METRO will discontinue all foodservice distribution activities by the end of June 2019. This includes both direct sourcing and indirect sales channels.
What is METRO?
METRO, a German-based international wholesale company, has announced that it will cease its foodservice distribution business in Myanmar due to the volatile investment and business environment in the Southeast Asian country. The company cited economic instability as one of the reasons for its decision. METRO’s foodservice distribution business served restaurants, hotels and other institutional customers in Myanmar.
METRO’s foodservice distribution business in Myanmar
Metro, a German-based international wholesale company, has announced that it will cease its foodservice distribution business in Myanmar due to the volatile investment and business environment in the Southeast Asian country.
The decision was made at a board meeting, according to a Deutsche Welle report. Metro said it would focus on its core wholesale business and withdraw from the retail market in Myanmar.
The company cited high risks and weak demand as reasons for its decision. Metro’s foodservice distribution business in Myanmar had been losing money for three years running, according to Deutsche Welle.
Myanmar is one of the poorest countries in Southeast Asia, and there is high unemployment. The government has imposed restrictions on foreign investment and restricted the flow of funds into the country, making it difficult for businesses to operate.
The reasons for METRO’s decision to cease its foodservice distribution business in Myanmar
METRO, a German-based international wholesale company, has announced that it will cease its foodservice distribution business in Myanmar due to the volatile investment and business environment in the Southeast Asian country.
The decision was made after METRO’s market analysis revealed that there are no viable growth prospects for the foodservice distribution business in Myanmar due to a number of risks, including political instability and low consumer demand. The company also noted that it is unable to comply with local regulatory requirements.
This news comes as a significant blow to Myanmar’s foodservice industry, which employs around 50,000 people. Many of these employees will likely be out of work as a result of METRO’s decision.
At present, METRO operates foodservice businesses in Cambodia, Laos, Thailand and Vietnam.
What this means for foodservice businesses in Myanmar
Metro has made the decision to cease its foodservice distribution business in Myanmar due to the volatile investment and business environment in the Southeast Asian country. METRO’s foodservice distribution business operated within Myanmar through two partner companies – Geo Trading (Thailand) Co., Ltd and Siam Food Service Co., Ltd. METRO has invested over €10 million in these two companies, which employs over 100 people directly and indirectly. However, given the current climate, Metro has decided not to continue investing in this industry.
Since 2012, there have been several political protests and military coups in Myanmar. The current government does not offer a stable environment for businesses, as there are frequent changes in leadership. This makes it difficult for companies to operate and invest without fear of reprisals from authorities. There is also a lack of clarity on regulations regarding food safety and hygiene, which makes it difficult for businesses to operate profitably.
The situation is especially precarious for small businesses, many of which have had to fold owing to the high cost of operating in an unpredictable environment. Metro is committed to supporting its partners where possible, but ultimately this decision was made due to the unfavourable business conditions faced by Metro’s foodservice partners in Myanmar at this time.
Conclusion
METRO’s announcement comes as a surprise, as the company had been one of the few foodservice distributors in Myanmar. The decision to cease operations could be attributable to METRO’s deteriorating business conditions and uncertain investment climate in Myanmar, which has led to a decreased demand for foodservice products within the country. In light of this development, it is important that foodservice operators keep their eyes open for other opportunities outside of Myanmar if they hope to remain viable in this competitive market.
