A Burma court has jailed a New Zealand bar manager and his business associates for insulting Buddhism over a flyer that showed a psychedelic depiction of Buddha wearing headphones.

Philip Blackwood, 32, Tun Thurein and Htut Ko Ko Lwin were given two years of hard labour for insulting religion and six months for disobeying an order from a public servant.

The trial of V Gastro manager Blackwood, bar owner Thurein and employee Lwin came as the predominantly Buddhist nation grapples with a surge of religious nationalism - including violence against members of the minority Muslim community.

The three were arrested in December after the image was used to promote a tapas bar and lounge, and have been detained in Burma's notorious Insein prison. The online ad was removed and an apology was posted.

After the sentencing, Blackwood told reporters as he was getting into a police van that he would appeal.

About half a dozen monks and hardline Buddhists gathered outside the Yangon court to hear the verdict.

About 90% of Burma's people are Buddhist. Perceived insults to the religion are taken seriously, especially in the context of the religious-based violence in the past few years pitting Buddhists against Muslims.