Thai Crises Drive Down Beer Sales

[george]

Crises drive down beer sales

BANGKOK: -- Thailand’s overall beer consumption is anticipated to see a significant drop of 6 per cent this year, impacted by political and flooding problems, according to Thai Asia Pacific Brewery (TAPB), manufacturer of Heineken beer.

Panya Pongtanya, TAPB’s general manager, said the local beer industry was also expected to be flat next year despite a recovery of the inbound tourism sector and clearer anti-alcohol regulation.

“Overall beer consumption dropped significantly by 30 per cent year on year in May because of the political unrest, which caused a huge drop in the number of inbound tourists to Bangkok and other provinces where the anti-government rallies took place,” he said.

Panya said the current flooding crisis in major provinces such as Nakhon Ratchasima, Surat Thani and Songkhla had impacted TAPB’s dealers there.

“We expect overall beer consumption to drop by between 9 and 10 per cent year on year in October, impacted by the floods,” Panya said. “We have a policy of totally replacing any products damaged by flood.”

All major players in the industry also witnessed a significant drop in beer sales, he said. Singha Corporation had seen a 10-per-cent year-on-year drop in sales of Singha beer and 9 per cent for Leo beer in the first nine months of this year. Chang beer of Thai Beverage had also seen a drop of between 2 and 3 per cent so far this year, while sales of its Archa beer dropped by more than 10 per cent in the first nine months.

Panya said TAPB expected its beer sales to drop by 2 per cent for the full year from 2009, better than the industry average.

“We also expect to grow by 6 per cent for 2011, which will be in line with our ‘Winning Value’ strategy adopted to win the market by delivering good value to our customers,” he said.

Under the strategy, the company will focus on the development of value-creation activities in three major pillars, which are: strengthening the foundation of the premium/imported portfolio; reinforcing high quality standards throughout its supply chain; and the roll-out of marketing campaigns via music, sport and art platforms to connect directly with targeted customers.

“Our formula to drive business growth is simple: Stay focused on quality, offer consumers more variety of premium brands, foster closer connections with consumers and trading partners, and deliver memorable brand experiences,” Panya said. “We also have seen many untapped opportunities in the market, especially in the premium-beer segment.”

He said the company currently brewed, marketed and distributed five major brands: Heineken, Tiger, Cheers, Guinness and Kilkenny. The latter two imported brands were added to TAPB’s product line in August, reinforcing the company’s vision to lead the industry with a portfolio of premium brands.

He said Diageo’s appointment of TAPB as the exclusive importer and distributor for its Guinness beer was also a “major win” for the company, as it is a product favoured by local expatriates and tourists.

Panya said Heineken’s acquisitions of UK-based Scottish & Newcastle in 2008 and Femsa of Mexico in 2010, two of the world’s leading brewers, give TAPB a huge competitive advantage in reinforcing the company’s portfolio of premium brands.

“We are in the process of identifying the premium products and brands that will meet the needs and lifestyles of local drinkers seeking to broaden their taste and enjoyment of international brews,” said Panya.

The company plans to make a local launch of its five to six premium imported beers, including Sol, Strong Bow and Desperado, in the Thai market in the near future.

-- The Nation 2010-11-09

[bkkmatt]

I don't see how political or flooding problems have anything to do with Beer sales?

If my home was flooded or i thought too much about the political mess this country is in i'd be rather depressed and the first thing i would be doing is reaching for an ice cold beer to drown my sorrows.......

[DP25]

I'm sure ThaiVisa members will be doing their best to reverse this trend

[Rinrada]

Read that they have banned the stuff for sale in the Gin Joints during the afternoons now ...so what do they expect..?

Mind Boggles

[cougar52]

Read that they have banned the stuff for sale in the Gin Joints during the afternoons now ...so what do they expect..?

Mind Boggles

Ditto Also, it is amazing how the Government so often say all the ills, (Protests, Bombings, Floods, Scams, Double Prices, etc.) don't have any affect on tourism.

But, when the profits of the beer market drop, “Overall beer consumption dropped significantly by 30 per cent year on year in May because of the political unrest, which caused a huge drop in the number of inbound tourists to Bangkok and other provinces where the anti-government rallies took place,” he said.

I really believe the Thai thinking can not grasp reality.

[kuffki]

so, in not so many words but it is mainly the tourists who do all the drinking of the local beer.

[siampolee]

So many concerns about the perceived evils of alcohol , yet wailing and gnashing of teeth when sales drop.

As already stated by Rinrada and Cougar52, "the authorities have shot themselves along with the brewing industry and the hospitality industry in-the foot along with the revenue department."

Every action has a consequence.

[fred007]

I don't see how political or flooding problems have anything to do with Beer sales?

If my home was flooded or i thought too much about the political mess this country is in i'd be rather depressed and the first thing i would be doing is reaching for an ice cold beer to drown my sorrows.......

Maybe ..The Powers at be think? ,Thia People are sick of seeing Brown Water.....Even if it comes out of a bottle...........

[DP25]

So many concerns about the perceived evils of alcohol , yet wailing and gnashing of teeth when sales drop.

As already stated by Rinrada and Cougar52, "the authorities have shot themselves along with the brewing industry and the hospitality industry in-the foot along with the revenue department."

Every action has a consequence.

I don't see any wailing or gnashing of teeth in that article. The only person quoted is the manager of a beer company, who obviously is not one of the people going on about the evils of alcohol. And he only expects a 2% drop for his company, so it's not like it's a big drop.

[Renbe]

That is good news, less beer means less drunken drivers and less people getting killed in drunken fights :-)

[Thai at Heart]

That is good news, less beer means less drunken drivers and less people getting killed in drunken fights :-)

Depends how you classify the reds escapades this year.

[bitterbatter]

so, in not so many words but it is mainly the tourists who do all the drinking of the local beer.

That is kind of a reach. Everywhere I go I see mostly Thais drinking beer or whiskey. Maybe it is because of the inexpensive price of Blend Whiskey that is causing this Crises as many are switching to the more economical solution to getting drunk. I still do my part and drink beer daily.

If they can figure out what the real crises are, maybe the beer companies will lobby to create a law to eliminate them.

Edited November 9, 2010 by bitterbatter

[Bengt]

Maybe the beer have been a bit expensive but by the other way it maybe result in less drunken drivers and save human lifes.....

[gotlost]

The local brews just stink.

[moetownblues]

I'm sure ThaiVisa members will be doing their best to reverse this trend

I'm doing my bit, just bought an extra slab. Had an over whelming urge to chip in and help out during this crisis. The prices are still the same tho.

[techno]

I'm sure ThaiVisa members will be doing their best to reverse this trend

Agree. Lets allow beer to be sold 24 hours a day in bars although l will only last for about 5 hours at best. That will improve the profitability of the poor brewers

[craigt3365]

I'm sure ThaiVisa members will be doing their best to reverse this trend

I sure did my part last night! I have a hard time saying NO to another when it's offered by one of those really cute beer gals. Plus, it was for charity.

[Pib]

so, in not so many words but it is mainly the tourists who do all the drinking of the local beer.

Tourists and farangs living in Thailand are just a drop in the beer bottle when it comes to total consumption within the country.

[moetownblues]

I'm sure ThaiVisa members will be doing their best to reverse this trend

I sure did my part last night! I have a hard time saying NO to another when it's offered by one of those really cute beer gals. Plus, it was for charity.

Well done my friend glad to see someone else is willing to put his hand in his pocket for a good cause. Need more like us to help in this time of need

[kuffki]

so, in not so many words but it is mainly the tourists who do all the drinking of the local beer.

Tourists and farangs living in Thailand are just a drop in the beer bottle when it comes to total consumption within the country.

Apparently not, according to this article the reason for drops is the fewer tourists and oh yeah the floods.

Clearly it will have nothing to do with few price increases and possibility that many people do not have the money since they do not have jobs because there are fewer tourists and for the drinking tourists, prices of beer in the clubs have gone up also, in some, taking it from 120baht per bottle up to 170baht per bottle.

[whybother]

Panya cited political instability, increase in excise taxes by 27 percent, and stricter alcohol control as the reasons for the drop in sales.

Nothing like a 27% tax increase to help reduce consumption.

[rubl]

I'm sure ThaiVisa members will be doing their best to reverse this trend

With a big bottle of Heineken 72 Baht, Chang 42, Archa 37 I'm not really surprised the TAPB manager is complaining. I doubt he speaks for his competitors though.

1.43 PM, too early to tackle this problem personally

[Pib]

so, in not so many words but it is mainly the tourists who do all the drinking of the local beer.

Tourists and farangs living in Thailand are just a drop in the beer bottle when it comes to total consumption within the country.

Apparently not, according to this article the reason for drops is the fewer tourists and oh yeah the floods.

Clearly it will have nothing to do with few price increases and possibility that many people do not have the money since they do not have jobs because there are fewer tourists and for the drinking tourists, prices of beer in the clubs have gone up also, in some, taking it from 120baht per bottle up to 170baht per bottle.

Beer has probably reached the price point in Thailand were many Thai's are cutting back on beer...probably just switching over to liquors. I expect most of that 120 baht to 170 baht per bottle increase you mention in some clubs is the increased cost of labor....paying for the in-bar entertainment. People not having jobs...what are you talking about? The way the Thai govt calculates unemployment rate almost everyone has a job...the unemployment rate is still below 2%. http://www.tradingeconomics.com/Economics/Unemployment-Rate.aspx?Symbol=THB Heck, western nations struggle to get their unemployment rate down to around 4-5% in good times, but Thailand is doing much lower than 5% even in slow times for tourism. But wouldn't it be something if everyone in Thailand who didn't have a job would go to the unemployment office to register as unemployed...the real unemployment rate in Thailand would be much higher than approx 2%.

I'll just stick to buying my 12 bottle cases of Chang Draught for 452 baht which is about 38 baht per bottle. Heck, even that current 452 baht price was only 435 baht at Makro/Lotus a few weeks ago...I expect they had to raise the price in order to pay for employing more sales assistants to ask you "Can I Help You" as you walk by....I think some stores must have a sales assistant for every square meter....or maybe two assistants per aisle...etc.

[moetownblues]

so, in not so many words but it is mainly the tourists who do all the drinking of the local beer.

Tourists and farangs living in Thailand are just a drop in the beer bottle when it comes to total consumption within the country.

Apparently not, according to this article the reason for drops is the fewer tourists and oh yeah the floods.

Clearly it will have nothing to do with few price increases and possibility that many people do not have the money since they do not have jobs because there are fewer tourists and for the drinking tourists, prices of beer in the clubs have gone up also, in some, taking it from 120baht per bottle up to 170baht per bottle.

Beer has probably reached the price point in Thailand were many Thai's are cutting back on beer...probably just switching over to liquors. I expect most of that 120 baht to 170 baht per bottle increase you mention in some clubs is the increased cost of labor....paying for the in-bar entertainment. People not having jobs...what are you talking about? The way the Thai govt calculates unemployment rate almost everyone has a job...the unemployment rate is still below 2%. http://www.tradingec...aspx?Symbol=THB Heck, western nations struggle to get their unemployment rate down to around 4-5% in good times, but Thailand is doing much lower than 5% even in slow times for tourism. But wouldn't it be something if everyone in Thailand who didn't have a job would go to the unemployment office to register as unemployed...the real unemployment rate in Thailand would be much higher than approx 2%.

I'll just stick to buying my 12 bottle cases of Chang Draught for 452 baht which is about 38 baht per bottle. Heck, even that current 452 baht price was only 435 baht at Makro/Lotus a few weeks ago...I expect they had to raise the price in order to pay for employing more sales assistants to ask you "Can I Help You" as you walk by....I think some stores must have a sales assistant for every square meter....or maybe two assistants per aisle...etc.

Yes I have to agree with sales assistance bit. Even before you get into a store you are greated by 3 people then see assistants standing around in groups of 3 just talking. I believe it is a law in Thailand that a farang company must employ so many staff depending on the size of the business or the business itself.

[Pib]

I've frequently thought the same. Kinda makes it hard for the govt to really get serious about limiting the number of big box stores which takes business away from the little mom and pop stores. But mom and pop are just going to have to realize the world is changing....for better or worst, it's changing.

[animatic]

"deliver memorable brand experiences"

So a very beery good buzz of an evening,

and a few sessions alone admiring the Leo girls or katoeys.

[rubl]

"deliver memorable brand experiences"

So a very beery good buzz of an evening,

and a few sessions alone admiring the Leo girls or katoeys.

Personally I would prefer the Leo girls. To see them is soothing these old eyes of mine

[evanson]

When you consider the daily wage for the average Thai is around three to four bottles of Chang, probably less, they turn to that gut rot 'lao khao'. Much cheaper and much more dangerous.

Ban it. And get your act together with your godawful 'beer' to at least give those who can afford it value for money.

[rubl]

I'm sure ThaiVisa members will be doing their best to reverse this trend

With a big bottle of Heineken 72 Baht, Chang 42, Archa 37 I'm not really surprised the TAPB manager is complaining. I doubt he speaks for his competitors though.

1.43 PM, too early to tackle this problem personally

11:57 PM As law-abiding, legal alien I just quickly walked to the mom/pop-shop 70 meters away and bought 2 big bottled of Chang Classic and a bag of ice, 91 Baht. Of course I wouldn't think of buying after midnight

[Mickeem]

I'm sure ThaiVisa members will be doing their best to reverse this trend

With a big bottle of Heineken 72 Baht, Chang 42, Archa 37 I'm not really surprised the TAPB manager is complaining. I doubt he speaks for his competitors though.

1.43 PM, too early to tackle this problem personally

11:57 PM As law-abiding, legal alien I just quickly walked to the mom/pop-shop 70 meters away and bought 2 big bottled of Chang Classic and a bag of ice, 91 Baht. Of course I wouldn't think of buying after midnight

2-3yrs back you would have got 3 bottles for that..