Bad News For Booze

[george]

Bad news for booze

PHUKET: -- The Excise Department’s tax increase on distilled spirits, which went into effect September 6, is gradually being reflected on store shelves across the island as retailers replace old stock with new.

The increase, which ostensibly has the twofold goal of cutting down on alcohol consumption and boosting government revenue, applies to all distilled alcohol products including brandy, whisky, “special blends”, rum, gin and vodka.

Distilled spirits are now subject to a tax of 40-50% of the market price, or 400 baht per liter of pure alcohol content – whichever is higher. Formerly the tax was 35-50% based on market price or 240 baht per liter of pure alcohol content.

The rise does not apply to beer and wine, which are still taxed at the old rate.

The announcement came after the recent mobile Cabinet meeting in Phang Nga and was prompt ed by data listed on a United Nations website which showed Thailand ranking fifth in the world in terms of per capita alcohol consumption, behind South Korea, the Bahamas, Taiwan and Bermuda.

At Tesco Lotus, the new tax formula has already resulted in price increases to several products, for example:

Starnovitch vodka: 225 baht to 232 baht; Kahlua liqueur: 899 baht to 919 baht; Malibu white rum: 739 baht to 759 baht; Clan MacGregor blended Scotch whisky: 279 baht to 283 baht; Camus cognac: 1,109 to 1,199 baht; Martell VSOP brandy: 1,199 baht to 1,269;

Wichan Meesen, Manager of the Market Place supermarket in Central Festival Phuket, said he did not believe the increase would have much effect on buying patterns.

“Even if they raised it to 500 baht per liter of pure alcohol, I think most of our customers would still have the spending power to continue buying what they want. Most of our customers are foreigners and price doesn’t seem to effect their behavior very much, so I don’t think this tax hike will affect us much,” he said.

The price increase has not gone completely unnoticed, however, he said. Overall sales in the shop increased about 20% during the past month as some customers came in to stock up on supplies while they are still available at the lower rate.

--Phuket Gazette 2005-09-17

[udon]

"Starnovitch vodka: 225 baht to 232 baht" Gee, I think I could live with that!

[davethailand]

No need to raise prices yet then. YET

[lomatopo]

The announcement came after the recent mobile Cabinet meeting in Phang Nga and was prompt ed by data listed on a United Nations website which showed Thailand ranking fifth in the world in terms of per capita alcohol consumption, behind South Korea, the Bahamas, Taiwan and Bermuda.

------------

Bahamas? Bermuda? Is that because there are a lot of tourists who are not counted in the population but who may drink a lot when on vacation?

Also, I wonder if the ex-pat community, and tourists, in Thailand raises the average, or lowers it?

[Pui]

Thai whisky is dangerously cheap. Some around 100B a bottle. i wonder if this mean the price of motor cycle taxi's will go up?

[MyNameIsFarang]

Thai whisky is dangerously cheap. Some around 100B a bottle. i wonder if this mean the price of motor cycle taxi's will go up?

<{POST_SNAPBACK}>

More importantly will the bargirls now ask for more money to support their alcoholic families?

[Artisan]

Bad news for booze

The increase, which ostensibly has the twofold goal of cutting down on alcohol consumption and boosting government revenue, applies to all distilled alcohol products including brandy, whisky, “special blends”, rum, gin and vodka.

<{POST_SNAPBACK}>

I'm confused about this "twofold goal" as there is a huge conflict between cutting down on alcohol consumption and, at the same time, boosting government revenue.

[loong]

If that is typical increase, nowhere near as much as the 400Baht/50% seemed to suggest. |So not the end of the world.

Incidently, re per capita consumption. The consumption of bootleg Lao Khao would not be included in the official figures.

[duncanm]

considering the actual effect on real prices it looks like it is pretty much designed to add to the coffers.

Considering the financial issues we're seeing at the moment it's a pretty good idea.

As someone who drinks spirits & wine ( how expensive! ) in moderation more than beer because the beer here gives me noticeable hangovers i'm not fussed.... even on a teachers salary

Maybe it will reduce the consumption of whiskey for the poorest, which may not be such a bad thing.

It's very hard to complain when you've survived the horrific tariffs for alchohol in the UK.

[sonthaya]

What about the supposed duty free boose for us tourists ?

[richard10365]

Thai whisky is dangerously cheap. Some around 100B a bottle. i wonder if this mean the price of motor cycle taxi's will go up?

<{POST_SNAPBACK}>

I think Lao Khao is around 35 to 40 baht a bottle.

[udon]

Is Thailand the only country that refers to local rum as Thai Whiskey?

[Bizz]

Liquor prices go up in bid to make drinking go down [07/09/48]

White alcohol spared to help communities

Liquor taxes are rising effective today under a government policy aimed at reducing alcohol consumption. The new tariff regime affects blended whiskies, brandies, rums and other spirits and effectively raises taxes for most spirits up to the maximum allowed under the current tax law.

Whiskies and brandies currently carry an excise tax of 45% of the ex-factory price or 240 baht per bottle, whichever is higher. The per-bottle tax is calculated based on 100% alcohol content, and varies based on the actual proof of the spirit.

Under the new rate, popular whiskies such as Spey Royal and Johnnie Walker will pay a rate of 50% of the ex-factory price or 400 baht per bottle of 100% alcohol content. The rates on brandies, now taxed at 35% or 240 baht per litre, will increase to 40% of the ex-factory price or 400 baht per litre.

A second category, covering special blended spirits such as Mekhong rum, will have rates set at 50% of ex-factory prices or 400 baht per litre compared with previous rates of 50% and 240 baht per litre.

The new rate structure will effectively increase tax rates for both premium and budget whiskies. The retail prices of most Thai spirits are expected to increase by 30 to 40 baht per bottle.

Utid Tamwatin, the Excise Department director-general, said the new structure did not affect tax rates on white spirits, given the government's policy to encourage rural community producers.

``If we had increased taxes, the fear is that it would hurt small community producers.

``While most of the white spirits in Thailand are produced by large distillers, as far as tax rates go, we are unable to take a selective approach,'' he said.

Industry executives said the new tax structure would hurt cheaper whiskey brands the most.

Phanuwat Wongsriphisan, the managing director of Pernod Ricard Thailand Co, the importer of Chivas Regal, 100 Pipers, and Master Blend, said consumers could potentially shift to more beer consumption due to the price changes.

Prices on both imported and domestic whiskey brands are likely to increase by 40 baht per bottle, with most retailers likely to boost prices starting in early 2006.

Another industry executive said the new tax rates would result in the price difference between local and imported whiskies narrowing.For instance, Sangsom taxes could potentially jump to 112 baht per bottle, compared to 67 baht now, compared with Spey Royal taxes rising to 112 baht from 95.

``The government view seems to be that locally produced Sangsom is no different than imported Spey Royal,'' the executive said.

Beer industry executives, however, took a different view, arguing that the higher alcohol content of spirits justified the higher taxes.

``We have seen a series of tax increases on alcoholic beverages in recent years, but consumption remains high. Tax increases are just a tool to help reduce consumption,'' the executive said.

He added that authorities needed to add additional anti-drinking programmes to help reduce consumption over the longer term.

I dont drink

[lampard10]

Excuse me. Am I completely stupid. I know this is Thailand, but did I just read that.

" It has the two-fold objective of cutting down on boozers, and raising the revenue from the said people"

So, they are going to make a fortune by taxing the stuff that people can't afford to buy. It does go to show that there are imbiciles in charge of the economy.

[meadish_sweetball]

This will make a nice buck for the government though... it is probably safe to say tourism has something to do with the high level of alcohol consumption too... (not that Thais drink little themselves, but the amount consumed by tourists should be notable as well)... so this is yet another way of finding a way to squeeze out something extra of the holiday makers.

[bob/nyc]

Excuse me. Am I completely stupid. I know this is Thailand, but did I just read that.

" It has the two-fold objective of cutting down on boozers, and raising the revenue from the said people"

So, they are going to make a fortune by taxing the stuff that people can't afford to buy. It does go to show that there are imbiciles in charge of the economy.

<{POST_SNAPBACK}>

Well I dont know if I would call them imbiciles. The same thing is being done here in NYC. The mayor increased the cigarette tax, $2.00 per pack, yes $2.00 per pack, which means a pack of Marlboro cost $7.50 in NYC. This is our twofold objective. They want every one to cut down on smoking, but also want to increase city revenue. So dont blame Thailand for copying the western world again.

[BlackJack]

nothing

i mean nothing surprises me anymore with Toxin at the helm

the liquor that should have the **** taxed out of it is the cheap low kow whiskey that makes you go deaf dumb and stupider after a few drinks

this stuff is lethal but remains at the same price so the lower class can enjoy a tipple -no tax increase

nice one

keep the masses stupid - sedated and in their place so they can vote for you next time

[Serendipitist]

They are not imbeciles. As usual, it's the masses who fail to understand basic economics while buying the 'spin' who are more probably the imbeciles.

Alcohol has a certain inelasticity in its demand curve. That is, alcohol's demand does not significantly decrease with increases in pricing. More to the point, alcohol is most usually taxed for revenue raising reasons (despite any spin to the contrary).

Nonetheless, if they really wanted to have an effect on drinking, an increase of duty of several thousand percent might make an interesting start. But somehow methinks this ain't going to happen...

Edited September 17, 2005 by Serendipitist

[Heiniken]

Thai whisky is dangerously cheap. Some around 100B a bottle. i wonder if this mean the price of motor cycle taxi's will go up?

<{POST_SNAPBACK}>

Yeah and Thai Airways have to put an extra few $ on the topp of the ticket

[samran]

They are not imbeciles. As usual, it's the masses who fail to understand basic economics while buying the 'spin' who are more probably the imbeciles.

<{POST_SNAPBACK}>

Alcohol has a certain inelasticity in its demand curve. That is, alcohol's demand does not significantly decrease with increases in pricing.  More to the point, alcohol is most usually taxed for revenue raising reasons (despite any spin to the contrary).

<{POST_SNAPBACK}>

Well said...though I'm not sure too many people here understood you. Just don't go on about Marginal Social Costs and Benefits. That'll really screw them up.

[Anon999]

Excuse me. Am I completely stupid. I know this is Thailand, but did I just read that.

" It has the two-fold objective of cutting down on boozers, and raising the revenue from the said people"

So, they are going to make a fortune by taxing the stuff that people can't afford to buy. It does go to show that there are imbiciles in charge of the economy.

<{POST_SNAPBACK}>

They do the same thing in the UK with the same objectives. Then they increase the opening hours and the hours off licences and superstores can sell it!

[MrWizard]

I have had it.......this is too much men I can not pay it anymore.

I stop drinking.......never did anyway....

[texan_cowboy]

About time. Maybe my neighbors will sleep a little on the weekends now.

[timi2546]

...let's get shopping then.

i will get drunk.

[mraloha]

Thailand is the most expensive place in the world to buy a imported car....you have many PMs and Generals wives that need to do allot of shopping in their imported cars, so the tariffs on everything will keep going up...as for the rank and file, they are not so important. Every year His Majesty the King gives a speech telling the PMs to remember that they are in office to take care of the people. The PMs in turn ignore Him and the people and fill their pockets with money. It is a sign of a country's dignity and character in the way they treat animals, cats and dogs mostly. Take a look at some of the street dogs in BKK or Chaingmai.

[dr_Pat_Pong]

"Starnovitch vodka: 225 baht to 232 baht" Gee, I think I could live with that! 

<{POST_SNAPBACK}>

me too

[udon]

"Starnovitch vodka: 225 baht to 232 baht" Gee, I think I could live with that! 

<{POST_SNAPBACK}>

me too

<{POST_SNAPBACK}>

I'll try to fit a litre of Smirnoff Black in my saddle bags along with a couple of those strange test tubes that go with the Black, ok?

[John_Betong]

Hi All,

I used to buy a small bottle of Sang Som for some of the ladies in my local gogo bar (this was appreciated and even less than the cost of a lady-drink). The last time I offered I was asked more than the 80 baht I used to give but could not understand why?

Anyway to cut a long story short, last night I bought a bottle of Sang Som in the Pat Pong 7-11 for 105 Baht! This used to cost 71 Baht in Foodland but they are now out of stock.

Cheers,

John_Betong

[loong]

Apparently Sang Som in the village shop is now 180 Baht from 140

[Gazza]

The rise doesn't seem to be all that worrysome. As long as there's no more planned for the immediate future.

I'm still gonna stock up on boot polish though, just in case.