Beer producers expected to suffer from excise tax hike: Fitch

[snoop1130]

Beer producers expected to suffer from excise tax hike: Fitch

By The Nation

 

Thailand’s new Excise Tax Act will have a larger impact on local beer producers than on producers of domestic spirits

 

That’s because the beer market is more competitive and demand is sensitive to prices, said Fitch Ratings.

 

The producers of non-alcoholic beverages will also be hit by the imposition of a first-time tax on sugar content in drinks.

 

Fitch expects some pressure on beer producers as their ability to pass on the increasing tax cost to consumers and maintain their profit margins largely depend on the magnitude of the tax increase and consumers’ purchasing power to absorb higher prices. Other than prices, beer demand is also sensitive to economic conditions and the festive mood in the country. 

 

Domestic beer sales volume has been volatile over the past 10 years – a drop of 9 per cent in 2009 amid political protests and an excise tax increase, a 14 per cent decline in 2011 due to severe flooding, and a 5 per cent fall in 2013 after a restructuring of the excise tax, according to figures from Thailand’s Office of Industrial Economics.

 

Thailand’s local spirits market has few players, with the largest, Thai Beverage Plc, occupying a 90 per cent market share by sales volume. Limited competition, together with inelastic demand for spirits, should support the operating performance of spirits producers over the medium term. Producers with a wide range of products in terms of alcohol content or price would be able to provide customers with a variety to match their purchasing power.

 

Source: http://www.nationmultimedia.com/detail/Economy/30327655

 

-- © Copyright The Nation 2017-9-25

[JohnLick]

4 times the price in Europe with 1/5 labor costs is suffering?

[RichardColeman]

Maybe when a new government get in they will add taxes on guns, tanks and submarines to get their own back.

[peperobi]

Pray for the poor beer producers!

[Currumbin]

2 minutes ago, peperobi said:

Pray for the poor beer producers!

Pray or pay?

[connda]

It added three baht to a can of beer locally.  Given that local Thai food vendors will increase their prices by 10 to 15 THB per plate to adjust for inflation, the excise tax is miniscule by comparison.  This is much ado about nothing.  No doubt the local Thai news agencies will drag out the 'news cycle' for another couple of months by hyping a non-issue. The only real issue is the sharp increase in tax on imported wine with a decrease in tax for local domestic wines.  That's basically a trade barrier and protectionism.  Local wine interests must have well funded lobbies. 

Edited September 26, 2017 by connda

[VocalNeal]

Normal? Sales volume goes down. Prices go up. TIT

[Ulic]

No need to worry about the beer producers, the profit

margins are huge.

[shackleton]

The last thing the  tourist coming to Thailand will worry about is a few baht on the cost of drinks 

considering what most will pay in their home countries

They are here for two -three weeks enjoying the sights of Thailand 

as the amount of  tourist arrivals show they are on the up 

[Currumbin]

1 hour ago, connda said:

It added three baht to a can of beer locally.  Given that local Thai food vendors will increase their prices by 10 to 15 THB per plate to adjust for inflation, the excise tax is miniscule by comparison.  This is much ado about nothing.  No doubt the local Thai news agencies will drag out the 'news cycle' for another couple of months by hyping a non-issue. The only real issue is the sharp increase in tax on imported wine with a decrease in tax for local domestic wines.  That's basically a trade barrier and protectionism.  Local wine interests must have well funded lobbies. 

It is not only the local wine interests that have well funded lobbies. I suspect that the local Dentists have lobbied for the increase tax on imported wine as the local wines have the capacity to remove the veneer from teeth.

[idman]

For the average Thai who only earns 300 baht a day yes of course a two or three baht increase will impact them a lot more than the average ExPat or tourist. With petrol rising rapidly once again, the cost of their food increasing their spending ability will suffer thus having a negative effect on the beer and alcohol producers.

[Currumbin]

1 hour ago, VocalNeal said:

Normal? Sales volume goes down. Prices go up. TIT

If alcohol was free I couldn't drink any more, however, I do feel for those Farangs that use the local 7 Eleven as their local bar. 3 baht X 20 cans X 7 X 52.....good lord, there goes the pension.

[ToddinChonburi]

The amazing whining Thailand !!

[petermik]

When I go into the bar now I ask my my usual beer with the provision "old stock khob khun krap"............works a treat

[Pdaz]

Yes, they produce very poor beer. Maybe that is half the problem ?

[heybruce]

" That’s because the beer market is more competitive and demand is sensitive to prices, said Fitch Ratings. "

 

BS.  The Singha and Chang duopolies have a strangle-hold on the Thai market due to laws that make it nearly impossible for competing breweries to come to Thailand, and import taxes that make quality imports ridiculously expensive.  That's why Thai beers are overpriced crap; lack of competition allows the duopoly to get away with it.

[dinsdale]

I have got absolutely no idea whats going on. My local m&p shop went up from 35 to 37 for a can of Leo on the day (not unusual for m&p shops to instantly increase their prices). Today back down to 35 (this I know because I haven't bought a beer there since they upped their price (please come back)). Local CJ Express was 34 for a can of Leo ran out of stock and I expected when re-stocked to go up. No. Still 34. Cigs seem to have remained the same, not sure  about all cigs, but my Bt70 pck is still 70. Someone earlier said going up in November. If you are seeing this I apologize for my response to your post. You may very well be right. Once again these idiots couldn't organise a piss up in a brewery or a f..k in a knock shop. Not complaining just confused.

Edited September 26, 2017 by dinsdale

[George FmplesdaCosteedback]

On 25/09/2017 at 9:00 PM, JohnLick said:

4 times the price in Europe with 1/5 labor costs is suffering?

Are you sure? The article is about beer and spirits not imported whine...

My favourite bar in town charges 90Tb a small bottle, so about £4 a pint (it costs more if you want to watch dancing girls).

In the UK, not known for cheap booze, I pay about £3.50 for a pint of larger in the pub. 

In the shops and out of town bars here it is cheaper, 200Tb for 3 large bottles in many music bars, and 7/elevens and supermarkets a large bottle of beer is about 55-60Tb, much the same as the UK.

My brand of ciggy went up today to 100Tb from 87Tb. Price rises on beer is expected to go up about 2Tb on a small can or small bottle.

 

 

 

Edited September 26, 2017 by George FmplesdaCosteedback

[Damrongsak]

4 minutes ago, George FmplesdaCosteedback said:

... (it costs more if you want to watch dancing girls)...

Does the price go down after you've had the beer blinders on for awhile?

[George FmplesdaCosteedback]

3 minutes ago, Damrongsak said:

Does the price go down after you've had the beer blinders on for awhile?

What???

[Thechook]

On par with beer prices in Australia now.

[George FmplesdaCosteedback]

The price of beer here in ordinary bars in comparison to the UK pubs has not changed since the 80s to my knowledge.

Those who frequent go-go bars can comment on the relative prices in the UK/US/Europe to Thailand with their own information.

Last time I was in a go-go bar here was some years ago, small beer was 160Tb, and I have never been to one in the UK (I guess they would need much stronger dance floors and poles).

Cigarettes are still much cheaper, but expensive for Asia now.

 

When the cost of electricity, gas, housing and petrol reaches parity with the UK I will go back...

 

 

 

 

 

[JohnLick]

9 hours ago, George FmplesdaCosteedback said:

Are you sure? The article is about beer and spirits not imported whine...

My favourite bar in town charges 90Tb a small bottle, so about £4 a pint (it costs more if you want to watch dancing girls).

In the UK, not known for cheap booze, I pay about £3.50 for a pint of larger in the pub. 

In the shops and out of town bars here it is cheaper, 200Tb for 3 large bottles in many music bars, and 7/elevens and supermarkets a large bottle of beer is about 55-60Tb, much the same as the UK.

My brand of ciggy went up today to 100Tb from 87Tb. Price rises on beer is expected to go up about 2Tb on a small can or small bottle.

This article is about beer prices and producers. Not restaurants / bars and their added overheads.

 

In Italy, Greece, or Germany you can get a (superior quality to Thai) beer for about 70 cent in store = 28 thb

In Slovakia, Czech etc you can get it from 15 thb

[George FmplesdaCosteedback]

13 hours ago, JohnLick said:

This article is about beer prices and producers. Not restaurants / bars and their added overheads.

 

In Italy, Greece, or Germany you can get a (superior quality to Thai) beer for about 70 cent in store = 28 thb

In Slovakia, Czech etc you can get it from 15 thb

"It's about beer prices and producers", so not what the consumer will pay in future due to the latest tax increases?

I said myself that beer is cheaper in (mid and southern) Europe, but about level with the UK after taxes. Not so in Northern Europe though. That is due to taxation not production costs etc.

 

The cost of production including tax determines the wholesale price, the wholesale price plus distribution and tax determines the retail price, so it is all relative anyway.

 

I guess what you are trying to say is the producers make too much profit and tax hikes should be absorbed.

Fat chance of that...

 

 

Edited September 27, 2017 by George FmplesdaCosteedback

[JohnLick]

1 hour ago, George FmplesdaCosteedback said:

Not so in Northern Europe though. That is due to taxation not production costs etc.

Well the mighty vikings were replaced by socialist pussies and feminists there.

[Bastos60]

On 26-9-2017 at 6:12 AM, shackleton said:

The last thing the  tourist coming to Thailand will worry about is a few baht on the cost of drinks 

considering what most will pay in their home countries

They are here for two -three weeks enjoying the sights of Thailand 

as the amount of  tourist arrivals show they are on the up 

Prices don't differ that much from the prices I pay in Thailand. Yes they have huge profit margins, but a 69 baht draft beer is actually more expensive then what I pay in some pubs in my home country. 
The tax increase won't be so much an issue, but the price increase the entertainment venues will include will make beer actually more expensive in Thailand than what I am paying for it at home.

[George FmplesdaCosteedback]

2 hours ago, JohnLick said:

Well the mighty vikings were replaced by socialist pussies and feminists there.

Beer prices will not be a major concern for tourists unless they really push them to an unacceptable level. Two or three weeks at 10Tb more a drink will just see the less well off back packers stay fewer days before moving on.

 

For expats, it is not a big enough rise to make people move to another country.

 

In reply to the prices in northern Europe:

The curse is spreading, and the MGBGTs and all the other "minorities" are on the up thanks to the PC socialist pussies.

Democracy be damned...

Cheers,

G

 

PS. Have you ever seen the movie Bicentennial Man?

 

 

 

 

[manarak]

On 26.9.2017 at 9:15 PM, George FmplesdaCosteedback said:

Are you sure? The article is about beer and spirits not imported whine...

My favourite bar in town charges 90Tb a small bottle, so about £4 a pint (it costs more if you want to watch dancing girls).

In the UK, not known for cheap booze, I pay about £3.50 for a pint of larger in the pub. 

In the shops and out of town bars here it is cheaper, 200Tb for 3 large bottles in many music bars, and 7/elevens and supermarkets a large bottle of beer is about 55-60Tb, much the same as the UK.

My brand of ciggy went up today to 100Tb from 87Tb. Price rises on beer is expected to go up about 2Tb on a small can or small bottle.

 

Cheap Beer brewn observing German purity laws is sold in Europe for as cheap as 22 eurocent per liter.

That's 8.6 baht per liter.

You do the math for the rest.

IMO many people are being ripped off by brewers and their own governments.
alone the question "why isn't there cheap beer available in my Supermarket" should be enough to trigger a probe into abusive taxation practices.

Edited September 27, 2017 by manarak

[George FmplesdaCosteedback]

21 hours ago, manarak said:

Cheap Beer brewn observing German purity laws is sold in Europe for as cheap as 22 eurocent per liter.

That's 8.6 baht per liter.

You do the math for the rest.

IMO many people are being ripped off by brewers and their own governments.
alone the question "why isn't there cheap beer available in my Supermarket" should be enough to trigger a probe into abusive taxation practices.

True, but I can't "do the math" without knowledge of the alcohol content as that is the first thing taxation is based on (in Europe and here). You can brew at home for your own use in the UK  but cannot distill alcohol legally.

Thais don't like "sipping beer" as they water is down with ice anyway, so it is all around 5% (now it is more uniformly controlled).

 

The Thai duopoly on beer and spirit production is unlikely to be changed. Much the same for tobacco products, I think they are called the Thailand Tobacco Monopoly. 1992 saw foreign brands allowed (to try to stop the smuggling) but they have always been expensive, and the new tax has increased the price much more than local brands.

 

There is a lot of history on both look it up.

ThaiBev stole Carlsberg, and what happened to Kloster?

 

Taxation works on numbers, €50 cents on half a liter of beer raises more than upping the top rate of income tax by 5%.

 

It's not about to change as the rich are all powerful.

 

 

 

 

[manarak]

1 minute ago, George FmplesdaCosteedback said:

True, but I can't "do the math" without knowledge of the alcohol content as that is the first thing taxation is based on (in Europe and here). You can brew at home for your own use in the UK  but cannot distill alcohol legally.

Thais don't like "sipping beer" as they water is down with ice anyway, so it is all around 5% (now it is more uniformly controlled).

 

The Thai duopoly on beer and spirit production is unlikely to be changed. Much the same for tobacco products, I think they are called the Thailand Tobacco Monopoly. 1992 saw foreign brands allowed (to try to stop the smuggling) but they have always been expensive, and the new tax has increased the price much more than local brands.

 

There is a lot of history on both look it up.

ThaiBev stole Carlsberg, and what happened to Kloster?

 

Taxation works on numbers, €50 cents on half a liter of beer raises more than upping the top rate of income tax by 5%.

 

It's not about to change as the rich are all powerful.

light German beers all have between 4.5 and 5% alcohol content.