Price Hikes On Thai Beers

[george]

Beverage-makers grapple with rising costs

BANGKOK: -- Some major producers have had to raise prices despite belt-tightening and cost-cutting efforts

Major beverage-makers are taking urgent measures, including price hikes, to deal with the rising cost of sugar.

A source from the carbonated-drink industry said his company was also studying its cost structure.

"We fastened our belt very tightly to control our costs and expenses. However, the increase of sugar and petrol prices seems to be an external factor and not controllable by the company," he said.

"I cannot say right now we'll be able to keep managing those rising costs. What we can do is analyse our cost structure and raise the retail price of our product to cope with the escalating costs of ingredients and distribution."

"Under the management initiative, we'll work together as a team. We'll share information and brainstorm to find the best practices to save costs," he added.

The Internal Trade Department last year allowed all carbonated-beverage makers to raise the price of their products from Bt7 to Bt8, the first increase in seven years.

Singha Corp and other local breweries have raised their beer prices since the beginning of this year, as they can no longer bear the increasing costs of major ingredients like malt, hops and yeast.

"We have already increased the price of our Leo Beer by Bt12 per 12-pack since last quarter.

The move is due to the steady increase in petrol prices, which lifted manufacturing and distribution costs by more than 15 per cent," said Piti Bhirom Bhakdi, marketing group manager of Singha Corp.

Leo Beer now sells at Bt407-Bt412 for a dozen bottles, he said.

Malt, hops, yeast and other beer ingredients are facing shortages as they have been heavily bought up and stocked by the more than 2,000 brewers in China, which naturally want to cash in on the Beijing Olympics this summer.

Tan Passakornnatee, CEO of Oishi Group, said rising costs did not affect his soft-drink company much.

"Our overall sugar cost has increased by Bt17 million from the recent increase of the sugar price in the market. Our Oishi green tea, however, has seen an increase in its cost of only 10 satang per bottle," he said.

"It's not that big a problem now. We can still adjust to the rising costs. We can see whether we can reduce any other costs that won't affect the quality of our products," he said.

The company does not see the need to change the price of any product it sells. It uses 3,000 tonnes of sugar annually, of which 90 tonnes go to its restaurant chains.

Suwandee Chaiwarut, marketing manager of TC Pharmaceutical Industries, the producer of Kratingdang (Red Bull) energy drink and Puriku white tea, said she did not have an exact figure for how much the company's costs have risen. The company is trying its best to maintain its prices.

"Like Oishi, we need to find other costs related to manufacturing that can be cut further, such as packaging and logistics costs. We have to be more cost-conscious," she said.

The company is lucky that one of its products - Puriku white tea - has seen great sales volume.

"With higher sales of our Puriku product, we can expand the production capacity of our factory, which will lead to larger economies of scale and will partly compensate for the rising cost of sugar," she added.

Food processors, which have been suffering the most from the sudden hike in the price of raw sugar, plan to call on the Cane and Sugar Board to ask for permission to use cheaper sugar from the export quota as temporary relief from skyrocketing production costs.

Paiboon Ponsuwanna, chairman of the Food Processing Industry Club under the Federation of Thai Industries, said this proposal would help those manufacturers that produce for export but did not submit applications for using sugar in the export quota, as well as for those whose products are sold in the domestic market.

He said producers of canned fruit and canned condensed, sweetened milk saw sugar growing from 10 per cent of their total production costs to 13 per cent. They have also shouldered higher costs for steel, whose price has risen about 20 per cent this year, and have been squeezed by the baht's appreciation.

"Our exporters usually receive orders from three to six months in advance. They have no time for renegotiations [on prices] and carry heavier cost burdens from the rapidly rising sugar price amid tough competition in the global market," he said.

Several factors are causing local manufacturers to lose competitiveness to imported products.

Foreign competitors can keep unit costs down by buying Thai sugar. The price of sugar for export undercuts the domestic price by more than Bt5 per kilogram.

Under recently concluded free-trade agreements, processed food imports now can come in duty-free, he added.

Vice chairman Visit Limprana said the proposal would give priority to manufacturers suffering seriously from higher sugar prices and those depending on domestic contents, such as fruit canneries.

However, it will also consider other sugar-related products such as soft drinks, which can indirectly affect consumers by boosting inflation.

Secretary-general Pravit Prakitsri said they would discuss details with the sugar board as soon as possible. They may need to reallocate the quotas for domestic and export sugar to help those manufacturers, he said.

-- The Nation 2008-05-13

ECONOMY BEER MARKET

Cheers aims for bigger fizz in two years

BANGKOK: -- Thai Asia Pacific Brewery Co (TAPB), the brewer of Heineken beer, is hoping that its low-cost Cheers beer will have cheerful sales, doubling to 600 million baht over the next two years. However, the target is still less than 1% of the economy beer segment valued at about 88 billion baht.

This segment is dominated by Singha Corporation's Leo beer with a 42.7% market share, followed by Chang and Archa by Thai Beverage with 38.5% and 17.9% respectively.

Launched in October 2005, Cheers now has improved quality and taste and has recorded 40% sales growth in the last 12 months, said Yodchaval Tirakanoksathit, the company's marketing manager for Cheers.

Donald Ottan, the company's on-site technical manager, said Cheers had a smoother taste and was easier to drink. The brand recently received the Monde Selection Gold Medal at a competition in Belgium.

Ms Yodchaval said competition in the budget beer segment would continue to intensify this year. Every brand would focus more on below-the-line marketing activities to reach consumers directly.

''We organise activities and campaigns, which will encourage consumers to try drinking our beer. Cheers is also available in many distribution channels,'' she said.

The company has just introduced a new large can (50 millilitres), reflecting the growing tendency among budget-conscious consumers to hold social gatherings with friends and colleagues at home instead of going out.

The new can offers another choice and convenience for drinkers who want slightly more volume than the standard 33ml can but less than a 64ml bottle. The price of a large can is 27 baht while the standard can is 20 baht.

However, bottles still account for 90% of the economy beer segment.

This year, TAPB expects that the total beer market will grow by 10% from 116 billion baht or 2.1 billion litres last year. Of the total, 84% of sales would be in the economy segment, 10% standard and 6% premium beer.

TAPB increased the price of Cheers slightly two months ago and reported no impact on sales. An executive said it had no policy to lift prices further in the near future despite higher raw material costs.

-- Bangkok Post 2008-05-09

[Dave the Dude]

TAPB increased the price of Cheers slightly two months ago and reported no impact on sales.

Which means there profits havnt increased , therfore they must be selling even less. GOOD PLAN

[steveromagnino]

TAPB increased the price of Cheers slightly two months ago and reported no impact on sales.

Which means there profits havnt increased , therfore they must be selling even less. GOOD PLAN

er... no impact on sales = sales units did not decrease or increase surely??!

Which means.....if they put the price up..... they generated increased revenue for the same volume?

but then again I am ESOL>

[lazeeboy]

yhis will make everyones budget go a little less rhan before

[TUCKER]

no impct on sales 0+0=0=no impact

[Totster]

Launched in October 2005, Cheers now has improved quality and taste and has recorded 40% sales growth in the last 12 months, said Yodchaval Tirakanoksathit, the company's marketing manager for Cheers.

Donald Ottan, the company's on-site technical manager, said Cheers had a smoother taste and was easier to drink. The brand recently received the Monde Selection Gold Medal at a competition in Belgium.

Yeah right.. the only people that will be able to drink Cheers are those with no ability to taste. They're not going to trick me into trying it again, even with a so called gold medal - one wonders how that "beer" could win anything but the wooden spoon.

totster

[KireB]

Launched in October 2005, Cheers now has improved quality and taste and has recorded 40% sales growth in the last 12 months, said Yodchaval Tirakanoksathit, the company's marketing manager for Cheers.

Donald Ottan, the company's on-site technical manager, said Cheers had a smoother taste and was easier to drink. The brand recently received the Monde Selection Gold Medal at a competition in Belgium.

Yeah right.. the only people that will be able to drink Cheers are those with no ability to taste. They're not going to trick me into trying it again, even with a so called gold medal - one wonders how that "beer" could win anything but the wooden spoon.

totster

Yeah, I had it once. The hangover was terrible, like chemical! Very nasty stuff. Even if they'd win the Beer Olympics Gold medals for the next 200 years, I wouldn't touch it again.

[astral]

Definitely time to cut out the sugar loaded soft drinks.

Not so sure about cutting down on the beer.

[soundman]

Cheers - now that can't possibly pass as a beer.

[aazA]

Yep cheers, sooner drink the water out the klong.

[astral]

However, the increase of sugar and petrol prices seems to be an external factor and not controllable by the company," he said.

Does this mean beer prices will spiral out of control in the way that oil has??

[grahamhc]

Beverage-makers grapple with rising costs

BANGKOK: -- Some major producers have had to raise prices despite belt-tightening and cost-cutting efforts

>>>>>>

The Internal Trade Department last year allowed all carbonated-beverage makers to raise the price of their products from Bt7 to Bt8, the first increase in seven years.

>>>>>>

Singha Corp and other local breweries have raised their beer prices since the beginning of this year, as they can no longer bear the increasing costs of major ingredients like malt, hops and yeast.

"We have already increased the price of our Leo Beer by Bt12 per 12-pack since last quarter.

>>>>>>>=

That is 1 Baht a bottle.

Am I cynical if I think this will be an excuse for some bar owners to increase their prices by 5 Baht a bottle / glass.... Last time beer was up 12 baht a 24 bottle case, they did it. (This way you can blame the Goverment or Supplier for your price hike)

[Expatmartin]

Beverage-makers grapple with rising costs

ECONOMY BEER MARKET

Cheers aims for bigger fizz in two years

The company has just introduced a new large can (50 millilitres), reflecting the growing tendency among budget-conscious consumers to hold social gatherings with friends and colleagues at home instead of going out.

50 millilitres at 27 Bath ? 540 Bath a liter

[vagabond48]

Cheers - now that can't possibly pass as a beer.

It is (was?) very successful in the USA.

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.

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For washing clothes that is.

[jayenram]

The company has just introduced a new large can (50 millilitres), reflecting the growing tendency among budget-conscious consumers to hold social gatherings with friends and colleagues at home instead of going out.

50 millilitres at 27 Bath ? 540 Bath a liter

Methinks it's a typo - should read 500 ml.

Archa has increased in price during the last six months from Bht 280.00 to Bht 335.00 per case (12 x 560 ml). Given that plus the decrease in my pension (exchange rate) of almost 10% plus a doubling of UK income t*x and the increased cost of diesel, I'll soon be broke!

Whilst I'm here I may as well put my vote in regarding the disgusting taste of Cheers "beer".

[nonthaburial]

Beverage-makers grapple with rising costs

ECONOMY BEER MARKET

Cheers aims for bigger fizz in two years

The company has just introduced a new large can (50 millilitres), reflecting the growing tendency among budget-conscious consumers to hold social gatherings with friends and colleagues at home instead of going out.

50 millilitres at 27 Bath ? 540 Bath a liter

All I can say is that you must have a very small bath