Rocky start for Thailand’s latest alcohol tax reform

[webfact]

As the newly proposed alcohol tax reforms in Thailand kick in, Nimmi Malhotra looks into the impact on the country’s wine trade.

 

Thailand has decided to cut its prohibitive alcohol taxes. The tax changes were announced earlier this year, and took effect from 1 March. The cabinet proposed an alcohol tax slash at three levels. First, the import duties of 54% will be reduced to 0%. Second, the excise tax will drop from 10% to 5%. Another excise tax, which applies to the volume and percentage of alcohol and calculated at 1,500 Bhat (£32.84) per litre for every 100 degrees of alcohol content, will now come down to 1,000 Bhat.

 

Christophe Imbert of Comte de Sibour Ltd, a wine distribution company with a strong focus on on-trade distribution, confirmed to db that the excise cuts are fully confirmed, and the import cuts will be applied to every exit from the bonded warehouse starting this week.

 

There are two reasons behind the tax system overhaul, according to Michel Conrad of Independent Wine and Spirits Ltd, a leading beverage importer with a global portfolio including Treasury Wine Estate and Concha y Toro.

 

“First, the new government wants to promote tourism,” he says. Secondly, “they are trying to get rid of entities who are under-declaring the correct amount of the wine they are importing.”

 

But businesses have faced challenges since the change in rules came into force.

 

All importers are now required to re-register every label with the excise department, and this time around, the customs and excise will determine the wine value.

 

Full story: The Drinks Business 2024-03-15

 

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[bamnutsak]

2 minutes ago, webfact said:

“they are trying to get rid of entities who are under-declaring the correct amount of the wine they are importing.”

 

 

 

Of course there's corruption. D'Oh, I forgot.

[proton]

Not seen even a one baht reduction on anything so far, when is this going to start?

[smedly]

unless this is passed to the consumer it is pointless, who thinks it will ?

 

I have my doubts unless government make it mandatory 

[bamnutsak]

1 minute ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

 

 

Explained in the article...

 

12 minutes ago, webfact said:

and the import cuts will be applied to every exit from the bonded warehouse starting this week.

 

[jacko45k]

1 minute ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

Agreed.... still well over-priced. 

[KannikaP]

6 minutes ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

Kulov vodka up another Bht 10 in the past month, now Bht 330.

[sammieuk1]

The new label will state plundered the living daylights out of you enjoy your stay, no doubt  🤔

[bamnutsak]

2 minutes ago, sammieuk1 said:

The new label will state plundered the living daylights out of you enjoy your stay, no doubt  🤔

 

Yeah, that, or a diseased liver.

 

https://aseannow.com/topic/1320938-thai-government-seeks-to-mandate-graphic-warnings-on-alcohol-products/

 

[proton]

33 minutes ago, bamnutsak said:

 

 

Explained in the article...

 

 

 

That only applies to wine, I thought it included local beer and spirits also?

[bamnutsak]

1 minute ago, proton said:

 

That only applies to wine, I thought it included local beer and spirits also?

 

Well the lead-in to the article explains that too...

 

49 minutes ago, webfact said:

Nimmi Malhotra looks into the impact on the country’s wine trade.

 

 

 

There were/have been changes in many aspects of alcohol taxation: import, excise, ad valorem.

 

This article is about wine.

 

 

[proton]

1 minute ago, bamnutsak said:

 

Well the lead-in to the article explains that too...

 

 

 

 

There were/have been changes in many aspects of alcohol taxation: import, excise, ad valorem.

 

This article is about wine.

 

 

 No reduction on beer or spirits but there should have been by now

[JoePai]

48 minutes ago, KannikaP said:

Kulov vodka up another Bht 10 in the past month, now Bht 330.

[ikke1959]

2 weeks later and all the same prices ....Nothing less

[Tropicalevo]

58 minutes ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

From the full article

 

“It’s not like tomorrow everybody will drop their prices by 30%. It’s going to take a long time to implement it step by step,” says Conrad, as the price changes must be reflected across the supply chain. “Maybe by the end of the year, we could see some effect.”

[Pique Dard]

1 hour ago, webfact said:

First, the new government wants to promote tourism,”

...obviously tourists enjoy drinking

[SABloke]

1 hour ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

Well, one would assume that the current stock on the shelves in your local shop were purchased weeks or months prior, so can't expect the retailers to just take a loss for your benefit. However, it would be interesting to see by how much prices go down in 7/11 et al next month. I will be surprised if they go down at all.

[foreverlomsak]

1 hour ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

Since the reductions in tax levies were announced, the only effect I've seen at some (not all) of my local "refreshment" stops, has been a 10 Baht increase in the price of bottles of local beer, I don't drink wine and very little spirits so don't really know about them.

[dinsdale]

Maybe the delay is more to do with working out the process after the announcement rather than before. The entrance tax is a good example of this. First the thought bubble, then the announcement and then work out how to implement it.

[Tropicalevo]

54 minutes ago, Pique Dard said:

...obviously tourists enjoy drinking

But not between 14:00 and 17:00

[proton]

30 minutes ago, SABloke said:

Well, one would assume that the current stock on the shelves in your local shop were purchased weeks or months prior, so can't expect the retailers to just take a loss for your benefit. However, it would be interesting to see by how much prices go down in 7/11 et al next month. I will be surprised if they go down at all.

 

You are amusing tax is paid upfront, I would have thought it's at the point of sale

[foreverlomsak]

12 minutes ago, proton said:

I would have thought it's at the point of sale

Which point of sale are you referring to, as there are multiple points of sale and the application of taxes and duties long before it hits the shop shelves (it's not all calculated and paid when you buy it)

[Walker88]

Ironically, perhaps, these "tax reductions" are going to result in the increase in prices of higher priced wines, because their actual value was never declared accurately.

 

From the article:

 

"All importers are now required to re-register every label with the excise department, and this time around, the customs and excise will determine the wine value."

 

The tax always had the greatest impact on cheap wines, like those sold at 7-11 or Wine Connection. Even moderately priced wines were under declared, as was the # of bottles imported (thus spreading even the modest tax across a greater number of bottles). The under declaration started at pretty low levels, at maybe 1500 baht wholesale.

 

I have found wines at Bangkok restaurants offered at a lower price than I can buy retail at a wine shop in the US (example, Fattoria le Pupille Saffredi)...and the wines at the restaurants are not *Chinese copies, but the real thing. With this tax 'reduction', mixed with Customs doing a simply online check as to what, for example, a 2016 Sassicaia actually costs, prices for better quality wines may well rise. The reductions are more likely to be seen at places like Wine Connection or big retail department stores like Makro or Big-C.

 

*Chinese firms produce lots of fakes. I used to see these in shops in Yangon. Sometimes they don't quite get the labels right. It could be a minor error, such as leaving out a letter, or it could be really bad, such as Shat-oh Raffeet Rofschigh (just joking, but some are truly bad, as is the wine)

[SABloke]

41 minutes ago, proton said:

 

You are amusing tax is paid upfront, I would have thought it's at the point of sale

 

VAT is paid at point of sale (retail), but the wholesalers and/or retailers pay import duties when they take possession of goods.

[proton]

1 hour ago, SABloke said:

 

VAT is paid at point of sale (retail), but the wholesalers and/or retailers pay import duties when they take possession of goods.

what about local beers and spirits?

[fondue zoo]

2 hours ago, Tropicalevo said:

From the full article

 

“It’s not like tomorrow everybody will drop their prices by 30%. It’s going to take a long time to implement it step by step,” says Conrad, as the price changes must be reflected across the supply chain. “Maybe by the end of the year, we could see some effect.”

 

 

Take pics of pricing labels now to compare a year from now.

 

 

[Guderian]

Any tax cuts are likely to be offset by the plummetting value of the Thai currency, lol.

[spidermike007]

I will believe this when I see it, the concept of the Thai government making a sacrifice to benefit consumers or tourism is unheard of. It would be a rather astonishing development and a display of wisdom and intelligence which is something that we very rarely ever see here on a governmental level.

 

The secondary consideration is will these reduced prices be passed on to the consumer? Thailand could have a very, very dynamic luxury wine industry if they lowered the taxes.

 

That 54% figure is not the correct amount for a wine. Import taxes are much, much higher than that on fine wine. Why else would good wine be 3 to 5x more expensive here, than in the US? 

 

Why is the tax on wine in Thailand 250% on average? In most cases, duties constitute a state’s primary protection against products imported from other countries in direct competition with local production.

 

https://silklegal.com/wine-tax-in-thailand-a-protectionist-barrier/

Edited March 15 by spidermike007

[digger70]

5 hours ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

It started but the public won't get it any cheaper

Me think some will increase in price when recalculate the real value.

The customs and excise will determine the wine value.

[Jumbo1968]

5 hours ago, proton said:

Not seen even a one baht reduction on anything so far, when is this going to start?

Because the stock on the shelves has already been taxed I would assume ?