Pepsi bottler faces legal case in Myanmar over worker complaints

Pepsi bottler faces legal case:- Every two weeks for nearly a year, Thoung Han has reported to a Myanmar court where the former electrical department team leader at a bottling plant making Pepsi and other drinks is pursuing legal action against the owner of the American beverage giant’s Myanmar operations.

Thoung Han says he was fired unfairly in 2022 without severance pay from a factory owned by Lotte MGS Beverages, which produces PepsiCo’s products in Myanmar. The lawsuit isn’t just about severance but is also for damages, including for more than 10 million kyat (US$4,770) for defamation, according to a court document seen by RFA.

Thoung Han alleges that he was verbally abused by a Lotte MGS boss and fired for taking a 10-minute lunch break, which he said he needed because he is diabetic. His dismissal letter said he was responsible for an accident that he says had nothing to do with his department. 

“He was swearing and told me, ‘You’re not allowed to have lunch … you don’t have respect,’” Thoung Han told Radio Free Asia, referring to his run-in with the Lotte manager. He was speaking shortly before he was due to make his 22nd trip to the court in Hmawbi, where Lotte operates a bottling plant.

The head of human resources for Lotte MGS, Hein Htet Aung, declined to go into details on any specific complaints, citing the legal case. He said the company was keen to address concerns and was confident the facts would be established in the proceedings.

“While we understand the importance of addressing concerns raised by individuals, it is essential to note that not all allegations may be founded on factual basis,” Hein Htet Aung said in a statement. “Rest assured, we are fully cooperating with the appropriate authorities and legal processes, trusting that the facts will be clarified through the due course of these proceedings.”

PepsiCo’s corporate office did not respond to a request for comment about the situation in Myanmar.

‘Many violations’

The Solidarity Trade Union Myanmar says dozens of people have been fired, often on baseless grounds, from Lotte’s plants. Employees complain of intimidation by management and a failure to make proper severance payments.

Over the past two years, 20 people have approached the union to complain about a lack of compensation after being fired from the factory, said the union’s director, Myo Myo Aye. The union helps workers handle complaints in Myanmar’s manufacturing sector. 

Myo Myo Aye said that all but one person, Thoung Han, had withdrawn their complaints.

“Before U Thoung Han’s case, there were many dismissal cases in that factory … but the workers didn’t dare complain,” she told RFA. 

In 2023, the Myanmar Labor Society, which monitors labor complaints and is not connected to the trade union, received seven reports of suspected labor violations at  the factory, which also produces 7Up, Sting, and Mirinda soft drinks. The society tracks complaints across Myanmar’s manufacturing sector and publishes an annual report.  

In 2023, nine dismissed employees, including Thoung Han, and a legal adviser were threatened by a group of unidentified men who told them they would “do anything to stop this case”, Myo Myo Aye and Thoung Han said.

“They told them, ‘You have to stop the negotiations and not continue the case, because it is attacking the brand name and company. If anything happens to you if you continue, we’re not responsible,’” Myo Myo Aye said.

Neither Myo Myo Aye nor Thoung Han knew the affiliation of the men. 

RFA could not independently verify their account. Asked about this complaint and others, Lotte MGS head of human resources Hein Htet Aung cited a company policy of refraining from discussing unsubstantiated claims, particularly given the legal proceedings. 

‘Watching’

Other employees have told Solidarity Trade Union Myanmar of verbal abuse, intimidation by management, and the replacement of fired employees by relatives of management, the union said. 

The union further alleges that in the factory’s Mandalay branch, a marketing group of over 30 people were fired at once for not reaching production targets. In the last two years, about 60 people have been dismissed from the company, both the union and Thoung Han said.

Thoung Han said a culture of bullying and harassment, and the pressure of unrealistic production targets, had forced some people to resign.

“The company is watching and taking notes and if they don't like anyone, they’ll come up with any reason to get them dismissed,” Thoung Han said. “If the company doesn't like someone, they do something to make them feel bad, uncomfortable, so they’ll resign, so there’s no need for compensation.”

Military rulers shunned international business for decades as they pursued an isolationist “Burmese way to socialism”. By the time the generals began opening the impoverished economy in the 1990s, international sanctions over the suppression of democracy stifled business.

PepsiCo’s left Myanmar in 1997 but returned in 2012, at the beginning of nearly a decade of tentative economic and political reforms. But hopes for democracy and growth fueled by record foreign investment were shattered by a 2021 military coup. RFA/SP