Two companies control Thailand's beer and spirits market; law changes unlikely to greatly affect customer choice

[webfact]

Picture: Thai Rath

 

Thailand's most influential media Thai Rath investigated the history of beer and spirits production in the country.

 

They said that most Thais know that the multi billion baht business is tied up in the hands of two major players.

 

And they concluded that changes in the law this week are unlikely to change that duopoly and that customer choice will largely remain limited to the offerings of the big two. 

 

Back in 1927 alcohol production and foreign imports were all in the hands of the state.

 

By 1959 things had been opened up to the private sector and further big changes came at the turn of the century when many new factories were built.

 

But only two companies controlled the market - Boodrawd Brewery and Thai Beverage. 

 

Investment needed was huge and these companies had an advantage in being able to control most of the market shutting out smaller firms.

 

In addition Thai laws created obstacles for competitors to enter the lucrative business. 

 

The big two just got bigger.

 

Back in 2020 alcoholic drinks made up 21% of the entire drinks market in Thailand, according to the Krungsri Research thinktank.

 

Its value was 473 billion baht or 64% of the entire beverage market.

 

Beer made up 54.3% and spirits 37.9% of the alcohol market.

 

Boonrawd were the first brewery in Thailand and are responsible for such household name brands as Singh, Leo and My Beer.

 

Thai Beverage were second to the party but rapidly expanded with brands such as Chang and Federbrau.

 

Together they controlled 95% of the beer market with Boonrawd still #1 in market share.

 

When it came to spirits there has developed even less competition with new competitors unable to get a foothold in the market.

 

Thai Beverage controls 80% of the spirits market and has 18 production facilities nationwide as well as control over imports via companies in its portfolio.

 

There are 30 main brands including Mekhong, Hong Thong, Saeng Som, Blend and Crown99 among many others. 

 

Euromonitor reported in 2020 that the beer market in Thailand was worth 260 billion baht with Boonrawd controlling 57.9% and Thai beverage 34.3%. Thai Asia Pacific Brewery had just a 4.7% stake in the total market.

 

Main brands and market share were Leo 44.8%,Chang 31.2%, Singh 11.2%, Heineken 3.8% and Archa 2.4%.

 

Spirits were worth 180 billion baht with Thai Beverage controlling 59.5%, Diageo Moet Henessy 8% and Regency Brandy 4.4%.

 

Top brands and market share were Ruang Khao 30.9%, Hong Thong 11.4%, Blend 285 11.2%, Regency 3.6%, Saeng Som 3% and Mekhong 2.5%.

 

Alcohol consumption per capita in Thailand leads the way among ASEAN nations.

 

The pandemic however caused a severe contraction in the market that is recovering in 2022.

 

Thai Beverage reported in the first nine months of 2022 that beer sales were up 15.3% and sales growth was 9%.

 

However, Krungsri have predicted that in the period from now until 2024 the market will rise but will not achieve pre-pandemic levels.

 

This is due to state controls, advertising controls, zoning and campaigns to stop people drinking due to public health concerns. 

 

Thai Rath concluded that changes to the law announced on Wednesday would do little to change the booze duopoly in Thailand.

 

Meaning that customer choice remains and will continue to be limited. 

 

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[RandolphGB]

A monopoly. Just like the banks, the airlines, the taxis and every other major industry in the country.

 

Big corporations and the government are connected and they’ll do everything they can to maintain the cartel. 

[ukrules]

Well we can't have any competition for the big boys can we.
 

I wonder if they're breaking any ASEAN type regulations here?

[Mavideol]

to avoid any misunderstandings title should read

 

Two companies control ALL of  Thailand's markets

[daveAustin]

2 hours ago, webfact said:

Main brands and market share were Leo 44.8%,Chang 31.2%, Singh 11.2%, Heineken 3.8% and Archa 2.4%

One of the downsides of living here is the local beer imo. Let other Thai brewers get in on the act and it could be so much better. Beer Laos trounces all the above, from a very poor nation.

[huangnon]

11 minutes ago, daveAustin said:

One of the downsides of living here is the local beer imo. Let other Thai brewers get in on the act and it could be so much better. Beer Laos trounces all the above, from a very poor nation.

Beer Laos holds up well against competition from a lot further afield than LOS, imo.

But you are correct, it puts it's supposedly wealthier Southern neighbor to shame with the meagre selection of cartel-operated, junkies-pish fayre produced here.

Edited November 4, 2022 by huangnon

[proton]

18 minutes ago, huangnon said:

Beer Laos holds up well against competition from a lot further afield than LOS, imo.

But you are correct, it puts it's supposedly wealthier Southern neighbor to shame with the meagre selection of cartel-operated, junkies-pish fayre produced here.

You could say they are only providing what people want, the locals prefer some of the worlds worst beers. Leo made 3 good ones this year but did not take off, locals prefer tasteless weak fizz. I see Leo has an extra strong one out- 5.1% instead of 5% ????

[Snig27]

2 hours ago, RandolphGB said:

A monopoly. Just like the banks, the airlines, the taxis and every other major industry in the country.

 

Big corporations and the government are connected and they’ll do everything they can to maintain the cartel. 

And a primary reason why democracy is not allowed to grow here. Monopolies of just about every major business and of power, all centred around the same tiny number of people who would and have done just about anything they can to destroy any threats to their immense power. It's just evil. 

 

Fortunately, some brewing alternatives exist in the bigger cities and hopefully will continue to grow. 

[TheFishman1]

They keep control because they pay the right people money every month TIT

[Phoenix Rising]

1 hour ago, daveAustin said:

One of the downsides of living here is the local beer imo. Let other Thai brewers get in on the act and it could be so much better. Beer Laos trounces all the above, from a very poor nation.

As I've posted before;

 

- Thailand: Great food, cr@ppy beer.

- All of Thailand's neighbours: Cr@ppy food, great beer.

[sambum]

Whatever happened to the proposed reduction in taxation on imported wine?

 

To great fanfare, it was supposed to happen months ago, but imported wine is still incredibly expensive in Thailand. I guess the "Big Two" decided that they would rather have people drinking their product(s) (But I don't see wine there?) and put pressure on the Government to ensure that it didn't happen. Consequently, it was just quietly swept under the carpet in the hope that it would be forgotten about?

[khunjeff]

1 hour ago, proton said:

Leo made 3 good ones this year but did not take off

I really enjoyed those, and they proved that the big players don't have to make cr@p.

[proton]

1 minute ago, khunjeff said:

I really enjoyed those, and they proved that the big players don't have to make cr@p.

Never got the price right but the product was very good

[topt]

4 minutes ago, sambum said:

Whatever happened to the proposed reduction in taxation on imported wine?

When did you dream that? ????

Even if someone suggested it, the likelihood of it happening would be miniscule.  

[klauskunkel]

4 hours ago, webfact said:

Thailand's most influential media Thai Rath investigated the history of beer and spirits production in the country.

Yes, but Thai Rath failed to mention the two companies' financial involvement with the government party..., maybe a bit dangerous?

 

Here is an excerpt from ISEAS 2021/29 “Thailand’s Elected Junta: The Pluralistic Poverty of Phalang Pracharat” by Paul Chambers (the entire paper is a good read, btw.):

 

PARTY FINANCE
Phalang Pracharat has primarily relied on financial infusions from its various factions, on public subsidies, and on private donations. The NCPO initially encouraged wealthy individuals and corporations to support Phalang Pracharat, and enticed them with promised benefits if they did so and threatened less preferential treatment if they did not. The choice proved easy since Phalang Pracharat’s 2019 victory and durability in office were a foregone conclusion. The party has thus since 2019 had the most access to finance of any political party. At least 39 of Phalang Pracharat’s MPs are company directors or in limited partnerships with a total level of capital amounting to 3.25 billion baht (US$108.3 million).[23] Most of these affluent MPs have been party faction leaders. Then there are deeper-pocketed financiers standing in the shadows of the MPs including such leading Thai concerns as Charoen Phokpand, ThaiBev, the Central Group, and Boonrawd Brewery. These concerns have reportedly been willing to contribute much more money than the MPs (though exact amounts are unknown).[24]

[ChrisKC]

None of that Duopoly brew or sell beer, it's lager ( they are brewed differently) and they can't make up their mind what it is, so they call it "lager beer" - a bit like whisky - gin!

Given that I am from England, I know what real beer is and whatever might be said about the Thai public defaulting to choosing Thai lager in the event of a shake up to involve real beer brewers, I think they would be very happy to share an "Exmoor Ale" or an "Old Speckled Hen", or a "Theakstons Old Peculiar" with me!

Oh and make that a pint, not that foreign litre stuff.   And no ice!!

 

Let's have a CAMRA here - Campaign for Real Ale

 

Cheers, Skol or "Bottoms Up" whatever takes your fancy.

 

 

Edited November 4, 2022 by ChrisKC
typo

[2baht]

Thankfully I like green tea and orange juice! ????

[it is what it is]

 

2 minutes ago, 2baht said:

Thankfully I like green tea and orange juice! ????

with you; coffee (one cup a day), tea or water.

[Laphroaig27]

1 Alcohol is expensive

2 Price of beer is ridiculous

3 The taxes are outrageous

4 I think low end whiskey not bottled in Scotland even big brands suspect, 50/50 with grain spirits. No longer drink it

5 Lao Khao should be illegal

6 Thai spirits should be 40%.

 

Anti free market. Welcome to planet Thailand. ASEAN, APEC lol.

[Laphroaig27]

There was a proposal to lower tax on all alcohol.

 

Nothing

[VocalNeal]

2 hours ago, proton said:

I see Leo has an extra strong one out- 5.1% instead of 5% ????

We should judge beer on flavour not alcohol content.???? It is easy to add a shot to any weak <deleted> to increase the alcohol content.

[VocalNeal]

8 minutes ago, Laphroaig27 said:

2 Price of beer is ridiculous

Compared to????

[George Aylesham]

Just a thought - if all the micro-brewers could create a single cooperative maybe their combined volumes under such an umbrella would be sufficient to meet the requirements of the law?

[smutcakes]

5 minutes ago, George Aylesham said:

Just a thought - if all the micro-brewers could create a single cooperative maybe their combined volumes under such an umbrella would be sufficient to meet the requirements of the law?

Singha and Thai Bev would bribe and lobby to introduce a new rule.

[DrPhibes]

2 hours ago, proton said:

You could say they are only providing what people want, the locals prefer some of the worlds worst beers. Leo made 3 good ones this year but did not take off, locals prefer tasteless weak fizz. I see Leo has an extra strong one out- 5.1% instead of 5% ????

Ya, I miss the old brown bottle Chang.  Much tastier and about 6.2%.  I think Beer Lao is about as close I can get to that memory for taste.

[Mac Mickmanus]

Did they ever find out why that top Government official was getting 50 000 a month from the beer companies ?

[mran66]

Would be very interesting to know what was the cost to the dominant players to get the voting result right... 

[mran66]

29 minutes ago, George Aylesham said:

Just a thought - if all the micro-brewers could create a single cooperative maybe their combined volumes under such an umbrella would be sufficient to meet the requirements of the law?

I would guess would be big challenge as the threshold to get started is so high. Very difficult for any small brand to get much volume, especially as the big boys control big volume distribution. For anyone to be able to grow, would need free open market and a lot of time to grow business gradually.

Edited November 4, 2022 by mran66

[VocalNeal]

Just now, mran66 said:

especially as the big boys control distribution.

Nail...head

[chilli42]

One is tempted to come to the conclusion that Thai business lacks the capability to compete on a level playing field.  The constant protection of industry assures that the talent pool will never develop the skills and competencies that would allow them to compete in an open market.  The protectionism is bad for everyone other than the wealthy incumbents