Why is Beer So Expensive in Thailand Grocery Stores?

[Time Traveller]

2 hours ago, wump said:

I think you need to look up the definition of capitalism. "Products are sold for a price which people will pay for." is exactly that. Many products have >500% markup.

You're being stupid. Of course a sale doesn't go through unless some buyer is willing to pay for it. I'm saying things get priced to sell based upon costs. If you think it's the other way around , - and yes we do see it in places like Venezuala where the government set price caps on food - then mechants simply stop selling them, because if they did it would be at a loss.

Pricing is not based upon what consumers will pay. It's based on costs to supply. If it wasn't then it would be uneconomic to produce that item and thus no supply.

 

Edited October 30, 2018 by Time Traveller

[BritManToo]

17 minutes ago, Time Traveller said:

So that explains why you have no idea on how things are priced.

 

Raw materials cost + manufacturing cost + labor cost + transportion/distribution cost + taxes + company profit margin = Sales price. 

2

Most items are priced based on what the customer will pay.

Raw materials, manufacturing, labour, transportation are not really relevant, without an open and free competitive market.

Edited October 30, 2018 by BritManToo
missed off the end of the sentence

[Time Traveller]

1 minute ago, BritManToo said:

Most items are priced based on what the customer will pay.

Raw materials, manufacturing, labour, transportation are not really relevant.

you must have never run a business. Are you a unionist or communist?

[BritManToo]

6 minutes ago, Time Traveller said:

you must have never run a business. Are you a unionist or communist?

Sorry, missed off the end of my sentence.

Thailand is not a free market, a couple of friendly Thai families with the collusion of the Thai authorities restrict and control the entire beer industry. There is no competition or free trade, so the production costs have little to do with the retail price.

Edited October 30, 2018 by BritManToo

[Cyclone88]

On 10/29/2018 at 9:28 AM, Banana7 said:

I'm just asking for the reasons for expensive beer in Thailand, nothing more.

Why is bottled water or coke so expensive in the UK?

Because it is.

 

Profit.

What ever the market will take.

wake up and live in the real world or go home if your that concerned over 5 baht.

[Snow Leopard]

How much is a beer in a bar or restaurant in the West? I will guarantee you it's not $1 CDN or $1 USD. For me, the prices are more close together in Thailand between the shop and the bar. 

 

 

 

Now the price question is over with. The main question is this. Why is the beer in Thailand absolute garbage? Horrible beer.   

[Henryford]

Don't even mention wine.

[SunsetT]

Still cheaper than UK supermarket beer, and what is more important; in Thailand, with cheap labour, to have it served in a 'normal' restaurant/bar is not much more.

[bbi1]

On 10/29/2018 at 9:14 AM, Banana7 said:

In Ontario Canada, 12 imperial ounces, 341 ml, is CAD$1 including all taxes - 12 packs are CAD$12 and 24 bottle cases are CAD$24, plus deposit of $.10 per bottle, which refunded upon return of the bottle.

 

Here in Thailand, they even short you on the contents of a bottle of beer, which is only 330 ml.

 

Thai people are generally smaller in height and body girth than Westerners, therefore that's the reason why the beer bottles here are only 330mls to compensate for their small bodies.

[Pchan25]

On ‎10‎/‎29‎/‎2018 at 3:14 AM, Banana7 said:

In Ontario Canada, 12 imperial ounces, 341 ml, is CAD$1 including all taxes - 12 packs are CAD$12 and 24 bottle cases are CAD$24, plus deposit of $.10 per bottle, which refunded upon return of the bottle.

 

Here in Thailand, they even short you on the contents of a bottle of beer, which is only 330 ml.

 

That is not true. In Germany and someother European Countries you also get 330 ml.

 

But if you want to buy cheap beer in a store you should come to Germany. 3 liters of beer for 1,69 Euro (about 70 THB). THe tax on alcohol is very low in Germany.

 

But if you go to a pub you have to pay around 4 Euros for a 500ml beer.

 

 

 

 

[mercman24]

Black Cock and Red Cock from Tesco, great stuff, add a dash of coke, an ice cube, and get by that pool. yeah !!

[Banana7]

6 hours ago, Snow Leopard said:

How much is a beer in a bar or restaurant in the West? I will guarantee you it's not $1 CDN or $1 USD. For me, the prices are more close together in Thailand between the shop and the bar. 

 

 

 

Now the price question is over with. The main question is this. Why is the beer in Thailand absolute garbage? Horrible beer.   

I drink at the Legion in Canada - CAD$4.50 for a 341ml. bottle of most normal Canadian beer, not craft beer or specialty beers.  The price increase, from $1 to $4.50, is because of operating overhead like establishment liquor licenses, labour costs (which are 10 times higher than Thailand), land taxes, etc., etc.  Also I believe a licensed establishment pays higher prices than an individual.

[rott]

8 hours ago, Time Traveller said:

So that explains why you have no idea on how things are priced.

 

Raw materials cost + manufacturing cost + labor cost + transportion/distribution cost + taxes + company profit margin = Sales price. 

 

Companies exist for one reason only. To make a profit. They don't operate out of generosity and sell things at a loss, otherwise they would soon cease to exist.

Spend half an hour reading reading economics for beginners.

 

Supply and demand.

 

Up until "profit margin" you have a formula for cost except that you have forgotten about overheads. If by taxes you mean vat you are talking from a retail viewpoint meaningless to the rest of us. Then you seem to assume that cost plus a universal standard profit margin is all there is to it. I was in a very competitive business and prices where generally what the job or customer would stand.

 

I once asked a supplier why a price had gone up 40% in less than a year and the reply was "at that time we were cutting prices 20%, that stopped and we have since had a 20% price increase". That was in more inflationary times. Remember them? I do.

 

Funny old world

Edited October 30, 2018 by rott

[Acharn]

Goes back many years. Maybe as far as the Chatchai Choonhaven government. They made a radical change to the excise tax on alcohol products, increasing the tax on beer relative to licquor. It was quite remarkable how much the market shifted away from beer. Been trying to remember roughly when it was, but I'm only sure it was after Prem left the Prime Ministership. Probably someone else will remember or know how to track it down on Google.

[Psychic]

Doesn't take long for things to go off the rails here.

The OP wanted to know why beer was expensive in Canada.

 

By which he means, I guess, relatively expensive.

 

As in, a country where minimum daily wage is 300B a six pack of beer is 200B.

 

Let me clear up the economic argument. In a pure, competitive environment price will tend to fall near the cost of production.

 

That clearly is not the case here, competition is limited.

 

I can't just set up a brewery and sell my product.

 

Then there is the tax regime.

Domestic taxes raise prices and punitive taxes on imports virtually eliminate foreign competition.

 

Regarding restaurant pricing, they charge what they can.

 

When I was in South Africa last there was no corkage charge at even top end restaurants so the prices were very good.

 

To some extent low end Thai restaurants operate under the same principle, customers simply won't pay big markups.

 

But the taxation is Thai government policy.

 

For some reason this brings out the "if you don't like it" contingent.

 

This is Thai policy and they can do what they want.

 

I think it is short sighted because the demand is inelastic.

 

Prices go up, consumption goes down.

 

That applies to expats mostly.

 

But there is a knock on effect with tourism.

 

Thailand is still fairly competitive.

But it is losing that edge.

 

If you have to pay 200B for a glass of crappy box wine and 120B for a pint of bad beer at a restaurant you might decide to have a nice cold glass of water instead. Or you might go to places like Mexico.

 

"Sensible" government (if such an animal exists) would seek to maximize their revenue.

 

If a tax change decreased revenue, you'd expect them to reverse it.

 

I'm not holding my breath.

 

Maybe when all those boxes of wine pass their expiry dates the makers will make enough noise to get some taxes rolled back.

 

But given some of the thinking I've seen I'd expect that if taxes curtail demand and reduce government revenue the typical response will be to raise taxes again to regain lost revenue.

 

Like I used to see with hotel prices.

"Have to go up, no customers this year."

 

.

 

 

 

 

Edited October 30, 2018 by Psychic

[KittenKong]

12 hours ago, Cyclone88 said:

Why is bottled water or coke so expensive in the UK?

Because it is.

Tesco UK have 5-litre bottles of water for £1.10, which is under 50B

https://www.tesco.com/groceries/en-GB/products/267832188

 

Price seems quite similar to here.

[Time Traveller]

8 hours ago, rott said:

Spend half an hour reading reading economics for beginners.

 

Supply and demand.

 

Up until "profit margin" you have a formula for cost except that you have forgotten about overheads. If by taxes you mean vat you are talking from a retail viewpoint meaningless to the rest of us. Then you seem to assume that cost plus a universal standard profit margin is all there is to it. I was in a very competitive business and prices where generally what the job or customer would stand.

 

I once asked a supplier why a price had gone up 40% in less than a year and the reply was "at that time we were cutting prices 20%, that stopped and we have since had a 20% price increase". That was in more inflationary times. Remember them? I do.

 

Funny old world

Again, let me say your knowledge of economics for beginners is the reason you don't understand. The real world is different from your theoretical textbook economics.

 

Let me give you an example that's more obvious for you to understand real world economics. In Venezuela, the average daily income of a worker is the same as the cost for a cup of coffee. (source:https://panampost.com/sabrina-martin/2018/01/04/new-monthly-minimum-wage-in-venezuela-barely-enough-to-buy-daily-cup-of-coffee/?cn-reloaded=1)

 

Let that sink in. The coffee shop does not sell the coffee at a price the customers can pay. They sell it at a price to cover their costs. Just as the Electricity company sells their electricity at a price to cover their costs, and just like the Fuel station sells their gasoline at a price to cover their costs. Even if buyers can not afford to buy it, they will not sell it below their cost to produce because that would mean they will go out of business. 

The costs are how everything is priced. End of story.

 

 

Edited October 30, 2018 by Time Traveller

[wump]

22 hours ago, Time Traveller said:

You're being stupid. Of course a sale doesn't go through unless some buyer is willing to pay for it. I'm saying things get priced to sell based upon costs.

Yeah right. And the new iPhone really has a cost base that justifies a sale price of $1300. This is not pure greed and capitalism at work at all. I am sure Apple would go bankrupt if it sold it for half the price (which would still be wayyy over manufacturing cost).

 

You ever heard of the supply demand curve? If there is still demand, there is absolutely no reason at all for the seller to base his price on cost and charge a lower price. He charges the highest price possible which is the one where supply and demand meet.

Edited October 31, 2018 by wump

[wump]

5 hours ago, Time Traveller said:

Again, let me say your knowledge of economics for beginners is the reason you don't understand. The real world is different from your theoretical textbook economics.

 

Let me give you an example that's more obvious for you to understand real world economics. In Venezuela, the average daily income of a worker is the same as the cost for a cup of coffee. (source:https://panampost.com/sabrina-martin/2018/01/04/new-monthly-minimum-wage-in-venezuela-barely-enough-to-buy-daily-cup-of-coffee/?cn-reloaded=1)

 

Let that sink in. The coffee shop does not sell the coffee at a price the customers can pay. They sell it at a price to cover their costs. Just as the Electricity company sells their electricity at a price to cover their costs, and just like the Fuel station sells their gasoline at a price to cover their costs. Even if buyers can not afford to buy it, they will not sell it below their cost to produce because that would mean they will go out of business. 

The costs are how everything is priced. End of story.

 

 

What you are describing is a planned economy (or call it communism) and it is very telling that you used Venezuela as an example. Fuel stations don't price their gasoline based on cost but based on location an other factors. Sometimes they sell for less than cost so they can attract people to spend money in the shop. Or sometimes they charge grossly inflated prices like on German motorways.

 

Cost is a rather small factor in the end price. Also consider:

Location (ever spend $15 on a beer in a night club?)

Brand (why would a coffee in Starbucks for 130 Baht have 4 times of the cost of a local shop?)

Convenience

Reputation (People happily pay some 100% more for electronic brands they trust)

Turnover (why most retail shops have a markup of 30-200%, there is discount shops that live on a very small margin but still make their profits via their high turnover).

 

[rott]

Supply and demand. Market forces.

 

This is why oil prices went from $100 to $40. Not because production costs plummeted. So they produced less oil. In Venezuela presumably there are less people selling coffee.

 

I learnt my economics at the sharp end, running a business. Having your home up as security for an overdraft for working capital and having personal guarantees on payments for all you can see focuses the mind wonderfully.

 

Bit more to it than your simplistic formula.

[KittenKong]

6 hours ago, Time Traveller said:

The coffee shop does not sell the coffee at a price the customers can pay. They sell it at a price to cover their costs. Just as the Electricity company sells their electricity at a price to cover their costs, and just like the Fuel station sells their gasoline at a price to cover their costs. Even if buyers can not afford to buy it, they will not sell it below their cost to produce because that would mean they will go out of business. 

The costs are how everything is priced. End of story.

No, that just dictates the minimum price, not the maximum price or the actual price. Besides which, for various reasons, businesses may indeed sell some items for less than cost price, though they usually either dont do it for long or they make up the difference on other items.

The actual selling price is normally either near what the market will bear, if the vendor is looking for low volume high margin, or nearer the cost price if he is looking for high volume low margin. Or somewhere in between, according to his business model.

 

As for the original question, beer is expensive in Thailand because the tax on it is relatively high. It's been that way for decades, so nothing new at all. I remember 40 years ago that a beer in Manila was half the price of a beer here. The same applies to wine of course. Combine that with the strange licensing hours and regular dry days here, and Thailand has never really been a sensible destination for alcoholics, unless you are the sort of alcoholic who can happily drink Thai white spirit.

[wump]

I kind of agree with your last paragraph, but keep in mind that there is only three major breweries in Thailand so there might be a bit of collusion and not just high taxes... just sayin

[elgenon]

On 10/28/2018 at 7:06 PM, BritManToo said:

You need to specify the size of the bottle.

Plenty of 600ml bottled beer for 50-55bht.

 

But in Canada there are alternative products driving the beer price down.

Yeah, the smoking one doesn't deflate your gizmo either. Clearly a better alternative. IMHO

[KittenKong]

9 hours ago, wump said:

I kind of agree with your last paragraph, but keep in mind that there is only three major breweries in Thailand so there might be a bit of collusion and not just high taxes... just sayin

It's certainly possible to an extent, but there are only two big ones in the RP today and 40 years ago there was only one.

In fact in many countries it's fairly common to only have a small number of huge brewing groups owning most of the brands.

[Hans007]

In most Supermarkets in germany fe 500 ML lokal brewed beer cost 29 eurocent..!! yes thats correct..good quality. Offcourse brands like Warsteiner,Becks or other A brands cost more, up to 79 eurocents for 500 ml can. So I agree that thai beer is kind of expensive. My GF told me in Hua Hin cost about 40 bath a can of beer..! thats more then 1 euro!!

Edited July 28, 2019 by Hans007

[Damrongsak]

On 10/30/2018 at 9:46 PM, wump said:

I kind of agree with your last paragraph, but keep in mind that there is only three major breweries in Thailand so there might be a bit of collusion and not just high taxes... just sayin

Like betting on a card game.  One raises their price a Baht, the next says "I'll see you and raise you a Baht." 

[meand]

because it is every 14 year old's wet dream to supply piss poor products and charge way too much for them. 

[sunnyboy2018]

On 10/29/2018 at 2:28 AM, Banana7 said:

I'm just asking for the reasons for expensive beer in Thailand, nothing more.

Its bottled fizzy pish...does not count as beer.....i drink brandy, Thai whiskey in Thailand and real ale and craft beers in UK.  But questioning a 5 baht difference indicates you are very careful with your money.  In some bars the same bottle would cost you 160 baht...but you would have a naked girl on your knee.

[sunnyboy2018]

On 10/31/2018 at 1:38 AM, KittenKong said:

No, that just dictates the minimum price, not the maximum price or the actual price. Besides which, for various reasons, businesses may indeed sell some items for less than cost price, though they usually either dont do it for long or they make up the difference on other items.

The actual selling price is normally either near what the market will bear, if the vendor is looking for low volume high margin, or nearer the cost price if he is looking for high volume low margin. Or somewhere in between, according to his business model.

 

As for the original question, beer is expensive in Thailand because the tax on it is relatively high. It's been that way for decades, so nothing new at all. I remember 40 years ago that a beer in Manila was half the price of a beer here. The same applies to wine of course. Combine that with the strange licensing hours and regular dry days here, and Thailand has never really been a sensible destination for alcoholics, unless you are the sort of alcoholic who can happily drink Thai white spirit.

I agree about beer prices 40 years ago. The cheap alternative was thai mae kong whisky which has been supplanted by sang som...dunno why...or wherw klosters beer has gone. I disagree about Thailand not being good for alkies..maybe not poverty stricken boozers. Sangsom suits me fine with plenty of soda with a honey on my knee.

[wisperone]

It's simple. Lure them in with the cheap sex, make money on the beer they drink. Gotta make it where they can.