EU Complains To WTO About Thai Pricing Of Its Alcohol Imports

[nothingleftbutfaith]

I love wine and i spend a lot of money on this hobby.

in thailand the prices of wine are considerably lower then in the west.

I font understand what the European are saying??

how can thailand breach the WTO when in fact the wines in thailand are sold cheaper then in Europe.

for exmaple wines from Saint Emilion, a more prestigious Bordeaux wine growing area are marketed in europe for outragous proces while in thailand they can be bought for less then 100 Euro.

if you wish to compare

a thai wine shop http://www.wineconnection.co.th/

Complete bullshit.

I'm french living in Thailand .

Any bottle available in Thailand, I can find at least 30% , if not 50% cheaper in France .

[Mobi]

Interesting.

A battle between one of the most corrupt customs departement in the world and the EU commission.

I wonder who will win?

the words "pot, kettle and black" come to mind.

The EU aren't exactly the bastion of free trade themselves. NZ I belive is allowed to export the princely sum of 2 kg of chocolate per year to the EU. This huge amount NZ embassy officials distribute for free once a year in brussels, as a protest against high import walls into the EU.

I don't disagree with you and I certainly have no love for the EU.

But they certainly put one over on young Billy Gates - that yankee whipper snapper, who did he think he was, trying to ram Microsoft down everone's throat? Digraceful!!

[cclub75]

how can thailand breach the WTO when in fact the wines in thailand are sold cheaper then in Europe.

for exmaple wines from Saint Emilion, a more prestigious Bordeaux wine growing area are marketed in europe for outragous proces while in thailand they can be bought for less then 100 Euro.

if you wish to compare

a thai wine shop http://www.wineconnection.co.th/

Obviously, you like to go against the trend.

Anyway. Let's prove us what you are saying by giving us the exact appellation and the millesime (year) on wineconnection.co.th and then we can compare with www.1855.com, a large french online retailer...

I think you took the same wine (appellation) but compare the price of... 2 differents millesime.

Common mistake.

A Saint-Emilion Chateau HighDiver 1995 for instance could be more expensive than a 2001. Or vice et versa.

[jbowman1993]

I love wine and i spend a lot of money on this hobby.

in thailand the prices of wine are considerably lower then in the west.

I font understand what the European are saying??

how can thailand breach the WTO when in fact the wines in thailand are sold cheaper then in Europe.

for exmaple wines from Saint Emilion, a more prestigious Bordeaux wine growing area are marketed in europe for outragous proces while in thailand they can be bought for less then 100 Euro.

if you wish to compare

a thai wine shop http://www.wineconnection.co.th/

Where's your Spock Hand Puppet?

I don't believe the EU complaint was with the amount of the import duties, I believe they said it was in regard to inconsistent pricing, where prices where sometimes assigned by the Thai customs bureau, rather than using the reported price from the company itself.

Chances that this will reduce the price of imported alchohol? None.

[dominique355]

Funny thing that Thailand is being sued at WTO for unfair import restrictions while at the same time Thailand has sued USA for unfair import restrictions on shrimps.

And while the EU is looking into unfair import restrictions on wine, I would like to encourage them to also look into unfair import taxes on cars.

Thailand is imposing tax on wine calculated on it's value (price plus transport cost, transport insurance, CIF), while most reasonable countries tax alcohols on value alone (VAT) and then on alcohol content. That's why e.g. a bottle of really cheap Italian wine (12% alcohol, € 3 in Europe) costs in Thailand the same as a bottle of Black Label (41% alcohol, € 15; here THB 1'000).

What do you try to prove here ? That all the countries in the world are trying to protect their own markets ? Of course they do.

I thought it is ironic that Thailand is accused of unfair practices and at the same time accuses other of what they do themselves.

But in this current case, it's totally different : it's just some rogue custom "officers" who are changing the rule, to their convenience and depending of their daily mood (and their needs for pocket money).

Furthermore you seem to confuse excises taxes (complex, with usually a taxation regarding the content of alcohol) and customs duties (or import taxes). Those are different.

For import taxe you have a fixed % applied on a declared value (the invoice). Period. That could change with some other parameters (like for instance, country of origin and other special regime like FTA).

Apparently the thai customs apply the official %.... but arbitrarily increase the value ! Leading to a great uncertainty for the importers. And a totally biased game.

What is unfair is Thailand's practice to add several taxes to goods imported from the EU and increase the final sales price to a level where normal people cannot afford it anymore, thus creating an unfair import restriction for EU wine producers. With a fair taxing on value only (without freight, insurance etc) and at a reasonable rate, wine growers would have a chance to compete on the Thai market against the hard liquor producers.

[highdiver]

If a french wine costs in USA more then it does in thailand, if a French wine costs anywhere else in the world apart from the Eu more then it costs in thailand then the case of the WTO is unreasonable.

if in some cases as I have tried to explain in my post the same Frech or italian wine in Thailand is cheaper then in france then it is not a "policy" that needs to be discussed by the WTO.

and as a nother poster said " they said it was in regard to inconsistent pricing, where prices where sometimes assigned by the Thai customs bureau, rather than using the reported price from the company itself."

[Plus]

they said it was in regard to inconsistent pricing, where prices where sometimes assigned by the Thai customs bureau, rather than using the reported price from the company itself.

I don't know who said that, but relynig on reported price from the company itself is naive. That's what Thais said in response - your declared prices are not fair either.

Thailand imports a lot of wine from the US, Australia, South Africa, Chile, and what not. Do they complain?

[samran]

abusive posts and OT writing related to abuse have been deleted.

Members who did this are noted and are being publically warned (nicely) for the first time. Continued infractions will lead to short holidays to those who want them.

[highdiver]

abusive posts and OT writing related to abuse have been deleted.

Members who did this are noted and are being publically warned (nicely) for the first time. Continued infractions will lead to short holidays to those who want them.

sorry Samran

[ChiangMaiAmerican]

Funny thing that Thailand is being sued at WTO for unfair import restrictions while at the same time Thailand has sued USA for unfair import restrictions on shrimps.

And while the EU is looking into unfair import restrictions on wine, I would like to encourage them to also look into unfair import taxes on cars.

Thailand is imposing tax on wine calculated on it's value (price plus transport cost, transport insurance, CIF), while most reasonable countries tax alcohols on value alone (VAT) and then on alcohol content. That's why e.g. a bottle of really cheap Italian wine (12% alcohol, € 3 in Europe) costs in Thailand the same as a bottle of Black Label (41% alcohol, € 15; here THB 1'000).

If that is for the benefit of the people, then perhaps only for the benefit of the alcoholics.

It's not just wine. Below is part of a Fedex guide on shipping to Thailand.

"Accordingly, it is understood that the Customs Department has issued an internal notification repealing the use of customs minimum prices on all imported goods. Thus, customs valuation would, in theory, be based on the transaction value as mentioned in the invoice, and in the case of related party transactions the appropriate test methods would be followed to ascertain the appropriate value.

In practice, Thai Customs still keeps records of the highest declared price of products imported into Thailand from invoices of previous shipments. The Customs Standard Bureau also uses such data to establish and distribute the indicative price of some products aiming at standardizing customs valuation on certain products throughout the country. The indicative price is then distributed internally among relevant Customs officials and is used when such officials are concerned about the accuracy of the price declared on the invoice.

The use of indicative prices is up to the official at the port of entry. Regularly, this indicative price will be used instead of the transaction value to determine the custom value, and to consequently assess import. This could happen across all sectors and on commercial as well as promotional materials."

http://www.fedex.com/us/international/irc/...ml?gtmcc=us#C03

Edited February 1, 2008 by ChiangMaiAmerican

[raro]

I love wine and i spend a lot of money on this hobby.

in thailand the prices of wine are considerably lower then in the west.

I font understand what the European are saying??

how can thailand breach the WTO when in fact the wines in thailand are sold cheaper then in Europe.

for exmaple wines from Saint Emilion, a more prestigious Bordeaux wine growing area are marketed in europe for outragous proces while in thailand they can be bought for less then 100 Euro.

if you wish to compare

a thai wine shop http://www.wineconnection.co.th/

I heard similar things from a friend of mine who likes expensive wines.

For us regular folks, however who can have something half-decent at 3 Euro a bottle in Europe, have to shell out 600 Baht or more for something of equal quality in Thailand.

This, however, has to do with the import duties, the excise taxes and the alcohol tax. All together as mentioned above accounts to roughly factor 3 of the CIF value.

[jackspratt]

Thailand is imposing tax on wine calculated on it's value (price plus transport cost, transport insurance, CIF), while most reasonable countries tax alcohols on value alone (VAT) and then on alcohol content. That's why e.g. a bottle of really cheap Italian wine (12% alcohol, € 3 in Europe) costs in Thailand the same as a bottle of Black Label (41% alcohol, € 15; here THB 1'000).

Under the valuation rules of the WTO it is entirely up to individual countries as to whether they choose to use an FOB (free on board, or whatever its current equivalent), or CIF (cost, insurance, freight) basis for determining the customs value, and then apply duty rates on that value.

Many more countries use the CIF basis (including the EU and ASEAN) than the FOB basis (including Australia, USA). I am not sure where "reasonableness" comes into the equation here.

Also your quoted example does not make sense to me when looking at the effect of customs duties on the end selling price.

The Euro 3 bottle of wine would incur duty of (approx) TBH90, plus 7% VAT (FYI, VAT = value added tax, and has nothing to do with value), with total import tax being TBH107.

The same calculation for the Black Label is TBH535.

So logically, the reasons for the similar end selling price of the two products must be:

1. internal taxes

2. costs and margins

3. Customs not accepting declared prices, and instead (illegally) using (highly inflated) list prices - which gets us back to the OP.

[swain]

I used to love to go to Trader Joes in the USA and pick up a bottle of what they called two buck chuck. Two dollar Chardonnay, Cabernet Sauvignon, and Merlot. The wine is not bad.. (if you havent tried the wine please don't comment) and I always picked up a few bottles along with some of my other favorites. But an equivalent bottle over here is 10 dollars.. Well I wont be buying much wine here... when I can buy the local beer and spirits at a reasonable price.