No Fizz For Foreign Beers In Thai Market Despite Afta

[webfact]

No fizz for foreign beers in Thai market despite Afta

By Sucheera Pinijparakarn

The Nation

Even though the zero import duty under the Afta scheme seems to give a break to foreign beer brands wanting to enter Thailand, it is not easy for them to make an impression on local brewers due to the local brewers' strong logistics networks.

After AFTA came into effect on January 1, Thailand and other Asean countries have been opening up their domestic markets to trade and allowing an influx of cheaper beer and liquor.

Trachoo Kanchanasatitya, marketing communications director for Boonrawd Trading, the licence holder and distributor of Asahi beer in Thailand, said last week that logistics is a key factor for beer brewers if they want to build sales and brand awareness.

"The ban on alcohol advertising in Thailand is a barrier for beer brewers, especially if foreign beers fail to ensure good logistics management and relationships with agents. It is not that easy for international beers to establish distribution chains and brand awareness in the Thai market," he said.

Importers also need to consider renting warehouses to stock their products and the impact that longer transportation might have on the taste of beer, he said.

Boonrawd Trading has no plan to import directly from Japan or to import foreign beers. It prefers to use the brewing base of Boonrawd because the standard of Asahi in Thailand is the same as in Japan.

The advantages of having a brewery in Thailand are quality control and transportation, he added.

Prin Malakula na Ayudhya, corporate affairs director for Thai Asia Pacific Brewery, the brewer of Heineken, said that even though AFTA has been in effect since early this year, its seems that the imported brands did not aggressively market in Thailand because of the political turmoil and fragile global economy.

However, if the political situation next year is stable and the economy is expanding, the company expects more beers such as Carlsberg and Chinese brands to be imported, he said.

Local beer companies will likely import beer to compete with the foreign beer firms.

The ban on alcohol advertising makes it difficult to launch a new beer, whether local or imported. This is why imported beers have been selling off-premises, such as entertainment venues, rather than selling on-premises, such as modern retailers and supermarkets.

The beer market, worth more than Bt90 billion, is expected to grow again after suffering a drop of 6 per cent this year. The expected entry of international labels next year as well as economic growth will be the main drivers boosting the beer market next year.

Imported beers account for 800,000-900,000 litres of the overall beer market of 1.9 billion litres.

Thai Asia Pacific has no plan to import beers because it has to consider the logistics expense. The company prefers brewing beers at its plant in Thailand, he added.

Preecha Chinaroot, managing director of CVS Syndicate, the importer of Corona beer from Mexico, said the company will next year bring in a Chinese beer to sell in the market here due to the zero import duty.

Backup from the strong logistics network of Boonrawd gives CVS an advantage in importing a Chinese beer compared to new players with no distribution franchise.

Pricing is a priority factor that beer importers must consider, but a lower price is not the road to success because local consumers are not familiar with those brands.

"Even though well-known foreign brands want to enter the Thai market, they don't want to sell at a lower price than local brews because foreign beers prefer to keep a brand image," he said.

Their famous brands and the dumping of foreign products are key concerns for the importers besides the zero import tax.

The reason why some local beer firms are planning to import beers next year is because they want to prevent imported beer rivals eating their market share. Local firms would be happier to see their imported beer cannibalise market share from their own products rather than see beers imported by other firms steal share from them, he added.

-- The Nation 2010-12-27

[gotlost]

Interesting read.

[bkkjames]

"Even though well-known foreign brands want to enter the Thai market, they don't want to sell at a lower price than local brews because foreign beers prefer to keep a brand image," he said.

Interesting quote - I guess it has nothing to do with not making any money - only Brand Image.

[Losangels]

Sounds to me the local beer companies don't want foreign beers to take away their market share. Foreign beer image and logistic issues aren't the main factors.

[SoftWater]

He seems to have a point about logistics and distribution.

Funnily enough I'm just sitting in the Barbican and can't get an Asahi as they'e out of stock. This is in the main 'Japanese toursist' sector of BKK, too.

[edwardandtubs]

Will Chinese beers be the same quality as Chinese milk?

[livingthedream]

Guiness on tap in Isaan?

[cdnvic]

Will Chinese beers be the same quality as Chinese milk?

Or wine?

[Siam Simon]

Will Chinese beers be the same quality as Chinese milk?

Or wine?

Try the lychee wine as a dessert wine if you can get hold of it. It's delish.

[a51mas]

Will Chinese beers be the same quality as Chinese milk?

Or wine?

cdnvic;

Give yourself a 3 days vacation for bashing.

[nomadic]

Guiness on tap in Isaan?

Oh man, I drove all around rural NKP looking for a case of guinness for christmas, but no luck. Had to settle for heineken!

[featography]

Guiness on tap in Isaan?

Oh man, I drove all around rural NKP looking for a case of guinness for christmas, but no luck. Had to settle for heineken!

I'm curous to know the difference between Thailand and Vietnam. Vn has Budweiser everywhere, thailand, nowhere. No snide remarks from the European TV members please.

[AsiaCheese]

~28 liters of beer per person [every person, including toddlers etc.] per year in Thailand.

Hmmmm. Let's see: what's the % of people over "legal" 18? Dunno, but CIA factbook says ~79% aged 15 and up [also more realistic as far as drinking beer is concerned], so that would make it ~36 liters per year, or ~3 liters per month. Not really that much.

[steelepulse]

Open market vs a protectionist market. At the price the two lead brewers sell and the way that the prices are fixed for buying wholesale, it's no wonder they don't want competition.

[nomadic]

Guiness on tap in Isaan?

Oh man, I drove all around rural NKP looking for a case of guinness for christmas, but no luck. Had to settle for heineken!

I'm curous to know the difference between Thailand and Vietnam. Vn has Budweiser everywhere, thailand, nowhere. No snide remarks from the European TV members please.

I'm in rural NKP province, and I've never seen anything here except singha, leo, tiger, and heineken. If anyone knows where to buy a decent red or brown ale around here, let me know, for the love of god!

[rockinrobin]

Asahi beer the same quality as made in Japan ! What utter nonsense. It taste's the same as all the other Thai beers , a mixture of fizzy water and chemicals, using rice as the cheaper grain source. The main barrier to foreign beers entering the local market in Thailand is the profit margin from selling to expat foreigners is too small. Tourists don't care what they drink as the surroundings take precedence over the product ( anything cold while watching a beach sunset or a pretty girl gyrating around a steel pole) and Thais have been indoctrinated over many years to prefer the awful local piss. Granted, with the alcohol advertising ban , it is difficult for new brands to establish themselves in the Thai market but that can only be remedied by hoping that the more enlightened locals encourage their countrymen to be a bit more adventurous ( I know , it won't happen).

I travel frequently to Vietnam and the beer there is just no comparison to here as each village and small town seems to have a brewery and in the big cities there are brewers making German Weize beer and Czech Pilsen as well as the international beers that actually taste like their original cousins, Carlsberg, Heineken, Tiger etc. I know it's just a pipe dream but couldn't just one of the local brewers produce a similar product that's actually drinkable .

[Sydebolle]

If NKP stands for Nakon Phanom = cross the Mekong into Thakaek, get up the ramp and to the left there are a few "duty free shops". The first one in the corner is quite well stocked (I get tons of Campari, Gin, Penfolds Bin 2 etc. from there). Cross the river again and yes, it is worthwhile doing the paperwork to get your own car in. That is where communism meets capitalism.

[bkk_mike]

Will Chinese beers be the same quality as Chinese milk?

Tsingtao's not bad. Probably because it was initially set up for the German community in that part of China. (It was in what was the German equivalent of Hong Kong.)

[geriatrickid]

Will Chinese beers be the same quality as Chinese milk?

No. I'd anticipate bad grain, the uncontrolled use of pesticides and herbicides combined with less than hygienic production facilities will give Chinese beer a special quality all of its own. As an added bonus, I'm sure there will be extra helpings of heavy metals.

[Elfin]

Will Chinese beers be the same quality as Chinese milk?

No. I'd anticipate bad grain, the uncontrolled use of pesticides and herbicides combined with less than hygienic production facilities will give Chinese beer a special quality all of its own. As an added bonus, I'm sure there will be extra helpings of heavy metals.

Still got the old "Cold War" mentality Geriatrickid??

I can assure you that every word you wrote is rubbish!

I drink a couple of Tsingtao longnecks every night-what I call "teacher's reward"

After 5 years of doing this, I am actually better looking, and a specimen of good health!

[stevehaigh]

Vn has Budweiser everywhere, thailand, nowhere. No snide remarks from the European TV members please.

we were talking about beer. (does that qualify as a snide remark).

[kimamey]

"Even though well-known foreign brands want to enter the Thai market, they don't want to sell at a lower price than local brews because foreign beers prefer to keep a brand image," he said.

Interesting quote - I guess it has nothing to do with not making any money - only Brand Image.

I think brand image is quite important as this is what enables them to charge a higher price. It's why they spend so much on advertising and why the ban in Thailand is such a problem. I'm sure I've seen Chang beer on a huge billboard though but I seem to remember there being some athletic looking guys on it as well so maybe it was linked to sponsorship of a team and that's a way to get round it. They sponsor Everton football club in the UK which will be the first contact with the name for many in the country. Perhaps foreign brewers will do that in Thailand if things stabilise.

[kimamey]

Will Chinese beers be the same quality as Chinese milk?

No. I'd anticipate bad grain, the uncontrolled use of pesticides and herbicides combined with less than hygienic production facilities will give Chinese beer a special quality all of its own. As an added bonus, I'm sure there will be extra helpings of heavy metals.

Still got the old "Cold War" mentality Geriatrickid??

I can assure you that every word you wrote is rubbish!

I drink a couple of Tsingtao longnecks every night-what I call "teacher's reward"

After 5 years of doing this, I am actually better looking, and a specimen of good health!

Unless it affects your mind or eyesight of course.

Actually I'm sure it could be a problem what with the corruption in China but then that could also be said for Thailand and as far as I know Thai beers are OK. Maybe it kills anything that's bad in it?

[kimamey]

Vn has Budweiser everywhere, thailand, nowhere. No snide remarks from the European TV members please.

we were talking about beer. (does that qualify as a snide remark).

Yup that does it for me. I'm sure you must be a Brit. We do that sort of thing so well.

[stevehaigh]

I travel frequently to Vietnam and the beer there is just no comparison to here as each village and small town seems to have a brewery and in the big cities there are brewers making German Weize beer and Czech Pilsen as well as the international beers that actually taste like their original cousins, Carlsberg, Heineken, Tiger etc. I know it's just a pipe dream but couldn't just one of the local brewers produce a similar product that's actually drinkable .

its actually quite hard to get a beer making license in Thailand. We have license to make wine and cider but are expressly forbidden from making beer. i think the big brewers have too much control of the licensing process but the local wine makers have very little clout and we are the only cider maker.

[ryladie99]

If NKP stands for Nakon Phanom = cross the Mekong into Thakaek, get up the ramp and to the left there are a few "duty free shops". The first one in the corner is quite well stocked (I get tons of Campari, Gin, Penfolds Bin 2 etc. from there). Cross the river again and yes, it is worthwhile doing the paperwork to get your own car in. That is where communism meets capitalism.

Thanks for the information, I grew up in Laos and have not been there since 1960. Hope to take a trip soon. Happy New year 2011.

[Ned]

I read that Chang and Leo are made with sticky rice instead of barley. But what about Singha? Anyone know for sure?

[Puccini]

I read that Chang and Leo are made with sticky rice instead of barley. But what about Singha? Anyone know for sure?

Are you saying the brewers in Thailand actually use some kind of grains, that they don't just pour a few kilos of assorted chemicals into a cauldron of boiling water, stir for 15 minutes in a clockwise direction at 360 rpm, then let the solution cool down before they fill it into bottles and cans? How I wish I could see an ingredients list for these beers! There must be a reason why the law, not only in Thailand, mandates a full list of ingredients on all types of foods and drinks except alcoholic beverages.

[asiawatcher]

We all remember what happened to Carlsberg... no chance to set up, only find a local market distributor and as long as the price is above the selling price here they may undertake distribution. But there is an oligopoly here and that is not going to change any time soon.

[ianh68]

Guiness on tap in Isaan?

Oh man, I drove all around rural NKP looking for a case of guinness for christmas, but no luck. Had to settle for heineken!

Keep an eye on the new Makro opening south of Tesco on the Nong Khai to Udon Thani road. I've heard Makro stock Guinness elsewhere.