Huge Tax Hikes On Liquor And Cigarettes

[fxe1200]

I was wondering about the overnight price raise for bottled milk. It went up from 65 to 71.50 THB for a two liter bottle. Does anybody know if this has something to do with the price hike on booze? Or may be another secret tax? Finanlly one can produce kefir with it, which does contain alcohol and it is my favoured drink too.

[mrbojangles]

There's also a huge difference between oil prices and cigarette prices - oil is essential to people's livelihood and the prices will need to go much, much higher in order to really affect demand in the short term. Smokes are not essential to anyone's livelihood, You don't have to smoke, you can just stop.

Believe me, if it was that easy, we wouldn't smoke.

Petrol and cigarettes are similar in that they are both inelastic goods.

Cigarettes are essential to those addicted to them, ask any of the smokers on this forum to confirm that for you.

It's not as simple as just giving up, which is why the government can raise the taxes knowing full well it will have little effect on demand. A rise in price will have an effect, but a small effect in relation to the rise in price.

Womble, sorry but who are you responding to? You have messed up the original quotes

[sjaak327]

Rather good news for those excise people down at the airport, more extortion money

[distortedlink]

It`s the 3 Ms.

M-ore price increases.

M-ore gap between have and have nots.

M-ore crime.

Edited August 29, 2007 by distortedlink

[robsamui]

Nobody seems to have mentioned that only 4 years ago the More brand that I smoke was 34 baht a pack. Prior to the current increase it was 47 baht and will now be 50 baht - an increase of 47%.

Mekong whisky increased in the same period from 75 baht to 110b for a small bottle - a much higher percentage than the current rise.

It didn't seem to create less consumption - nor did banning alcohol sales between midnight and 6.am.

Rob

Edited August 29, 2007 by robsamui

[JonnyF]

This will do nothing to decrease consumption or stop people taking up the habit, it is too small a hike. It will only affect the amount of money that poor smokers/drinkers (and their families) will be able to spend on more essential goods. For most farang the increase is laughable.

The tax collected from smokers and drinkers FAR outweighs the cost to the government of treating the diseases that result from these habits, especially in Thailand where public healthcare is virtually non-existant.

It's a short term measurement by the "government" to raise cash to help bail themselves out of the mess that they have started to create. Anyone who thinks they have done this for the long term benefit of the nations health are kidding themselves.

[gbswales]

claim they are doing so to reduce consumption and hence benefit the community.

fewer smokers = fewer deaths , disabilities and family bereavements from lung and heart disease.

lower alcohol consumption = fewer road deaths and fewer alcohol related crimes (such as rape , crimes of violence and spousal abuse.)

community benefits dont come much better than that.

On the other side of the coin it may lead to more depression and increase casual thefts by people, many of whom drink and smoke to compensate for the poverty and poor lifestyle. For people living in Bangkok the quality of the air from traffic pollution, or the poor working conditions for many, will kill them anyway - long before drinking and smoking do! The first argument was right - governments look for soft targets when it comes to taxation and this government dont even have to worry about the opinion of the electorate! The incoming democratically elected government (when it arrives) will be able to say "that was the previous administrations fault". Putting aside all the rights and wrongs of smoking and drinking I think it is morally wrong for a caretaker (and unelected) government to make any radical changes that are not part of it's reason for taking power in the first place

[wileycoyote]

Any idea ,what the increase on wine will be ?

[navajo]

Huge tax hikes on liquor and cigarettes

The Cabinet yesterday approved a drastic hike in liquor and tobacco taxes, citing a new government policy to reduce consumption and a much-needed reduction in treatment costs for those affected by drinking and smoking. Published on

The tax hike on liquor, starting today, only effects local brands while the increase in tobacco tax covers both local and imported brands.

Prices for the locally-distilled "white liquor", with an alcohol content of 28 to 40 per cent, will be increased by Bt9 to Bt12 per 0.625-litre bottle or around Bt110 per litre - up from Bt70.

The rates for blended liquors, with an alcohol content of 38 to 40 per cent, will be increased by Bt9-Bt12 per 0.625-litre bottle.

The rates for brandies and other premium brands will increase by up to Bt90 per 0.640-litre bottle.

Local cigarettes will cost an extra Bt2 per pack, while imported brands will cost an extra Bt3.

The Cabinet said it expected the tax hike would result in a reduction of 60-65 million litres of local alcohol being drunk each year and a 20 million pack decrease in cigarette use.

Reactions from the liquor industry to the tax hike were mixed. Chatchai Viratyosin, marketing manager of Singha Corporation, said: "The tax increase for white liquor is too low for what it should be, when compared to other kinds of alcoholic drinks."

He said the tax level should correspond to the degree of alcohol content. "The government should have raised the white liquor tax to Bt240 per litre, to ensure fair competition among the wider alcoholic products.

"But nevertheless, it is a good sign, since the white liquor tax hasn't been increased for at least 20 years. I can still see some sort of state protection. But public pressure is mounting."

Viroj Chantaramolee, senior vice president of Thai Beverage Marketing, said the company's senior management would meet today to discuss the implications.

Zanita Kajiji, marketing manager of Diageo Moet Hennessy (Thailand), expected the company's products and market share to be affected.

Source: The Nation - 29 August 2007

[MaBiak]

It is a double edged sword. From purely economic point of view the government has to pay part of the cost from the damage caused by alcohol and taboo like crime, health costs, emergency response and loss of productivity thus less tax in the long term. But, gov'ts depend heavily of these taxes. If they raise them too much consumption will drop dramatically and gov't can't pay it's bills. If everyone in Thailand stopped smoking and drinking tomorrow the Thai gov't would be in financial trouble.

From a social and long term point of view, taxing these products to some degree has an over all positive effect. IMHO

[wilko]

I thought the junta were here just to sort out a fair and democratic election - what's that got to do with the price of beer?

[wilko]

THere are plenty of examples of what restrictions on alcohol can do - in the States it was called "prohibition" - that golden era of peace and tranquility in the cities...and backwaters and poverty----

[STOUTBOY]

If the past is any indicator, those who were fine with the coup, rampant corruption in public contracts, the southern insurrection, etc, will now join in loud protest

IF YOU ARE THAI YOU HAVE EVERY RIGHT TO DO THIS, IF YOU ARE NOT AND ARE UNHAPPY WITH THE SITUATION THEN GO BACK TO YOUR OWN COUNTRY.

[PeaceBlondie]

Oh good, another 'go back to your home country' poster. Well, I'm the lucky guy: my addiction is neither tobacco or alcohol, so I'm going to stay here in good old Thailand, where smoking and getting drunk are part of the Thai culture now.

It's quite okay to tax the consumption of addictive substances. It's a shame the govt. won't use the money for the right stuff, but that's what govt.'s do.

The USA has a govt. commission to assess the cost of alcohol consumption, and if they are anywhere near right, every single drink should cost about $2 more than it costs.

[womble]

There's also a huge difference between oil prices and cigarette prices - oil is essential to people's livelihood and the prices will need to go much, much higher in order to really affect demand in the short term. Smokes are not essential to anyone's livelihood, You don't have to smoke, you can just stop.

Believe me, if it was that easy, we wouldn't smoke.

Petrol and cigarettes are similar in that they are both inelastic goods.

Cigarettes are essential to those addicted to them, ask any of the smokers on this forum to confirm that for you.

It's not as simple as just giving up, which is why the government can raise the taxes knowing full well it will have little effect on demand. A rise in price will have an effect, but a small effect in relation to the rise in price.

Womble, sorry but who are you responding to? You have messed up the original quotes

sorry replying to nikster, i messed up the quote!

[ovenman]

If the past is any indicator, those who were fine with the coup, rampant corruption in public contracts, the southern insurrection, etc, will now join in loud protest

IF YOU ARE THAI YOU HAVE EVERY RIGHT TO DO THIS, IF YOU ARE NOT AND ARE UNHAPPY WITH THE SITUATION THEN GO BACK TO YOUR OWN COUNTRY.

Oh good, another 'go back to your home country' poster.

Extra points for the ALL CAPS though, with special bonus points awarded for his online nick also being ALL CAPS.

What I find utterly disingenuous about this sort of story is how the gov't is supposedly taking action to reduce consumption but on the other hand, they're crowing about increasing their tax revenue at the same time. Truth be told (and they'll never admit to this), they don't really want everybody to quit as that would make the tax revenue from the frowned-upon activity drop to zero.

Edited August 29, 2007 by ovenman

[howerski]

It will just lead to more boot-legging. More people will switch back to homemade whisky and home grown tobacco. The people I know in the local village will drink mechor and other legal whiskies if they have the cash. If they haven't it's the old white whisky and roll-ups... more health problems and more misery

[peterpanner]

I agree with economists on this one. It will ahve some kind of an effect in reducing the number of smokers over time. Most people don't have money like the foreigners who are chain smokers. In Thailand people still buy one or two cigarettes from small shops. This could help reduce the number of poor people who smoke. I feel that anything against the corporations getting rich exploiting poor people is good.

I don't know the correct stats, but there is absolutely no doubt in my mind that Asians, including Thais, smoke A LOT more than foreigners. Of all Thai guys I know, one does not smoke. Of all foreigners I know, one does. (I observed this for guys only, as I hardly know any woman who smokes, whatever nationalities).

As for the person mentioning something like "Easy, just quit smoking" - I quit years ago, and can tell you, the first week was a nightmare, then it took months to stop missing the famous cigarette after lunch. Nothing easy there at all.

[rogerchiangmai]

Lies dam lies and statistics - yes using figures selectively can make them appear different. I'm not hung up on whether the increases are huge or not. It is however certainly true that increased price reduces demand - it may be that the increases this time around are just the start as small increases can be more easily absorbed - but no government even this one can afford to make themselves too unpopular in one go. In fact this government has very little to gain from the so called sin taxes, they will hardly be able to realise the benefits of the increased revenue yields. I think that they are motivated with a desire to do the right thing for Thailand and Thai people so I think we should respect that. Any increase gains publicity of course and helps to get the message across that smoking and drinking are harmful and undesirable. I cannot believe that it is 20 years or more since the last increase on some spirits....

R

Edited August 29, 2007 by rogerchiangmai

[somtaamgaiyang]

Lies dam lies and statistics - yes using figures selectively can make them appear different. I'm not hung up on whether the increases are huge or not. It is however certainly true that increased price reduces demand - it may be that the increases this time around are just the start as small increases can be more easily absorbed - but no government even this one can afford to make themselves too unpopular in one go. In fact this government has very little to gain from the so called sin taxes, they will hardly be able to realise the benefits of the increased revenue yields. I think that they are motivated with a desire to do the right thing for Thailand and Thai people so I think we should respect that. Any increase gains publicity of course and helps to get the message across that smoking and drinking are harmful and undesirable. I cannot believe that it is 20 years or more since the last increase on some spirits....

R

If we want to applaud the Thai govt for caring so much, please could they explain why they own a cigarette company making over 60% of all the cigarettes in Thailand? And why do they exempt native wild tobacco sold in the market from tax?

[AsiaCheese]

claim they are doing so to reduce consumption and hence benefit the community.

fewer smokers = fewer deaths , disabilities and family bereavements from lung and heart disease.

lower alcohol consumption = fewer road deaths and fewer alcohol related crimes (such as rape , crimes of violence and spousal abuse.)

community benefits dont come much better than that.

Except it doesn't really work...

I've seen prices going into orbit on grounds of tax reasons in Sweden (lived there for some time & 'am connected' still) and Switzerland (my previous home base). The real big benefit is the tax income, which interestingly enough only delivers miniscule trickles of money to prevention campaigns.

Now let's see: how many countries have their mittens directly in either of the two industries, aside from grabbing taxes? Not few, I assure you. In Switzerland, some off the tobacco tax is used for gov't support of tobacco farmers -- now how's that for a good one. And they published a report yesterday which says that 5% of the entire Swiss population -- that includes babies & grandmas -- is seriously hooked on alcohol. But there are subsidies going to local wine & white alcohol producers.

There's only one end-all to the story (unrealistic as all other attempts): level alcohol with yah-baa and cigarettes with ganja as far as the law is concerned. Sheeesh, that would benefit me -- sort-of -- as a non-drinking smoker

[goonerthegooner]

This is another way of creaming money out of all and sundry,as the so called tourism industry has all but dried up.

Full marks for the curator of this one.

KEEP THEM COMING,THAILAND WILL BE FINISHED IN 2 YEARS

Goodnight from the

Hua Hin Mafia

[Neeranam]

There's only one end-all to the story (unrealistic as all other attempts): level alcohol with yah-baa and cigarettes with ganja as far as the law is concerned. Sheeesh, that would benefit me -- sort-of -- as a non-drinking smoker

I disagree - alcohol is much worse than 'yaa baa' and opium. Cigarettes are much worse than ganja.

[womble]

There's only one end-all to the story (unrealistic as all other attempts): level alcohol with yah-baa and cigarettes with ganja as far as the law is concerned. Sheeesh, that would benefit me -- sort-of -- as a non-drinking smoker

I disagree - alcohol is much worse than 'yaa baa' and opium. Cigarettes are much worse than ganja.

I agree cigarettes are more damaging than ganja, and most likely opium in an unrefined state.

Not sure about yaa baa tho, for the individual adicted to eigher I would say they are both as bad as each other in their own way.

Sure Alcohol is a bigger problem due to higher numbers of addicts and users that have accidents and fight etc, but if you look at it on a case by case basis they are two equal evils IMHO.

[wilko]

If the past is any indicator, those who were fine with the coup, rampant corruption in public contracts, the southern insurrection, etc, will now join in loud protest

IF YOU ARE THAI YOU HAVE EVERY RIGHT TO DO THIS, IF YOU ARE NOT AND ARE UNHAPPY WITH THE SITUATION THEN GO BACK TO YOUR OWN COUNTRY.

Congratulations! You've won the "get back to your own country" fatuous argument award of the week.

[A_Traveller]

For those who are so keen to map yaa-bar and alcohol, suggest searching for Tweaking, and Tweakers to get a US perspective.

Regards

[AsiaCheese]

For those who are so keen to map yaa-bar and alcohol, suggest searching for Tweaking, and Tweakers to get a US perspective.

Regards

Huhhh? Tweakers tweaking what? Mai koh chai. You mean: this is throwing everything in one pot, like some people go into the terrorist category by origin and beard lenght -- US-style?

No, what I meant was: any gov't that's serious about going against smokes & drinks should go a few steps further than lame tax hikes. The question is only: how many steps to Orwellian conditions...?

[peterpanner]

I just came back from Carrefour, new sign in wine section:

"Sorry, limit of liquor sale is 2 bottles per basket / person / day / family."

What in ... is that supposed to help? Now you need to drive to 4 supermarkets when you have a party?

[AsiaCheese]

I just came back from Carrefour, new sign in wine section:

"Sorry, limit of liquor sale is 2 bottles per basket / person / day / family."

What in ... is that supposed to help? Now you need to drive to 4 supermarkets when you have a party?

No, enter the same supermarket 14 times in a row

[liberty9133]

The reduction in US consumption is attributable to education and it took 30 years to achieve. While the price of a pack of cigarettes in the US is in the $5 to $6USD range, those still addicted continue to pay the price. While one cannot be absolute in saying that the demand curve is inelastic, one can say that it is "almost" inelastic in the short term. Unless a government tackles the education side, it cannot hope to curb use solely by taxation.

The US started in schools to educate. It disallowed certain advertising venues, notably TV. It required all packages to be labelled that the Surgeon General has determined that cigarette smoking was dangerous. It remains to be seen how this tax increase affects the poor. Good monitoring of the results could help. I doubt if the government has the means or the will to sufficiently perform such monitoring.

"Cigarettes have inelastic demand curves, price changes have little effect on demand."

That is simply untrue. How do you account from the huge drop in smoking in the US, education? Baloney! As with most other commodities, higher prices lead to lower demand. I'm not sure that a 3THB increase is sufficient. Regardless, congratulations to the Thai government for getting this one right.