Beer Consumption: Controls Take Toll On Brewers

[george]

BEER CONSUMPTION: Controls take toll on brewers

BANGKOK: -- Govt measures have resulted in zero growth, say local makers of Heineken, Singha. Strict controls on alcohol consumption have left their mark on local brewers, who have witnessed flat growth in the Bt82-billion beer market this year and expect the same next year, said Heineken brewer Thai Asia Pacific Brewery Co Ltd (TAPB) and Singha’s Boonrawd Brewery.

To boost sales, TAPB has set aside a Bt1.2 billion marketing budget for next year aimed at stimulating consumption in the premium beer market. Boonrawd will spend less than Bt1 billion next year.

“We have to admit the controls are really effective,” said Piti Bhirombhakdi, advertising manager of Boonrawd Trading Co Ltd, the marketing arm of Boonrawd Brewery. He also foresees a further tightening of rules to control alcohol consumption, probably through a total ban of television commercials. At present, ads for alcohol products can run only after 10pm.

Piti said the situation would drive brewers into a price war and lead to cost-cutting to stay ahead of competitors. “The government aims mainly at restricting advertising and sales times, but not consumption. Once we all get into a price war to maintain sales, consumption could grow.”

The restricted advertising period and time limits on when alcohol products can be sold are the two main policies that have been enforced this year. Apparently to please anti-drinking groups who are against the SET listing of Chang brewer Thai Beverage Co Ltd, the government recently reduced the alcohol-sales period for small retail shops and convenience stores from 2 am to midnight, which is expected to hurt beer consumption even further.

Piti said his company was already behind target to boost sales 35 per cent this year. But through below-the-line advertising, it has managed to snatch 41 per cent of the total market this year, with the goal of becoming the No-1 player next year, with a 47-per-cent market share.

The brewer of Heineken, Tiger and Cheers beers, targeted at the premium, standard and economy segments, respectively, TAPB attributed the dismal market to the government’s new restrictions, as well as higher oil prices that have reduced consumers’ disposable income for recreational spending.

“Reduced sales in the South were another factor, because tourists in holiday destinations like Phuket are substantial consumers of beer,” said Panya Pongtanya, general manager of TAPB.

TAPB said that so far this year, the premium-beer segment had fallen 3 per cent, because of Carlsberg’s exit and a decline in the number of smaller brands, while the standard-beer segment grew 3 per cent, driven by new brands like Tiger and Blue Ice. The economy-beer segment did not grow.

Panya said the overall beer market would remain flat next year, because oil prices would remain high. Other factors are rising interest rates and a strict regulatory environment. Economic pressures have affected local beer consumption, as people have less money in their pockets.

TAPB reported 7 per cent growth yesterday, to Bt7.5 billion sales for the fiscal year ended in September. TAPB has targeted 20-per-cent growth for next year. This year, Heineken took 94 per cent of the premium-beer market.

“Next year will be much more challenging to the company than before,” said Jeff Kimble, commercial director of TAPB. “We want to promote the Heineken brand and the overall premium-beer market by recruiting new drinkers to the segment. Premium beers will take care of themselves.”

Panya said TAPB would like to raise its proportion of the premium-beer segment from its current 9 per cent to 12-14 per cent over the next three years.

He added that while the standard-beer segment today accounted for 12 per cent of the overall market, economy beer dominated at 79 per cent.

“Even as we celebrate the firm’s success in our 10th anniversary year, we are very mindful that the company will capture at least 15 per cent of Thailand’s total beer market in three years to become a major player in this highly competitive environment,” said Panya. He added that TAPB currently held a 9-per-cent market share of the overall beer market in Thailand.

--The Nation 2005-11-11

[astral]

Come on guys, Drink up.

We can't have a flat beer market.......................

[sonthaya]

Come on guys, Drink up.

We can't have a flat beer market.......................

 

<{POST_SNAPBACK}>

Come on, let's have one more

[jayenram]

I really have tried my best.

[cdnvic]

I really have tried my best.

I think you personally account for the fact that Chang/Archa are not reporting losses. Good work!

cv

[dr_Pat_Pong]

George does his bit for the economic growth of Chang.

[sierra01]

Don't you just feel sorry for the brewers? It's affecting their profits, company cars will have to last 6 months longer, expense accounts will be scrutinised a bit more closely, fewer 'business' trips. Or will it mean a zero pay rise for the workers next time? My heart bleeds for them

[yeti]

Piti said the situation would drive brewers into a price war

<{POST_SNAPBACK}>

That's good news.

Come on begin the war !!!

[george]

George does his bit for the economic growth of Chang.       

You bet!

[jayenram]

George does his bit for the economic growth of Chang.       

<{POST_SNAPBACK}>

You call that "a BIT"?

[dr_Pat_Pong]

Orright Orright ... a H U G E bit

[sonthaya]

Could I have a Chang, please

[dr_Pat_Pong]

George has got a heap of 'em

[jayenram]

George has got a heap of 'em         

<{POST_SNAPBACK}>

He must have got a new shipment in then.

[dr_Pat_Pong]

George has got a heap of 'em         

<{POST_SNAPBACK}>

He must have got a new shipment in then.

<{POST_SNAPBACK}>

He's travelling. Stocks up on Chag and ice every 100 klms