Saturday, July 24, 2021

business

Alcohol industry feels the pinch as pandemic hits sales


The revenue of the alcohol industry might drop to its lowest in 10 years.

Thanakorn Kuptajit, secretary-general of the Thai Alcohol Business Association, said the third outbreak had a serious impact on the overall business sector including the alcohol industry because many clusters were difficult to control and occurred in large cities, urban, metropolitan areas, and major tourist cities, which are areas that generate the most income.

“The first and second outbreaks were still limited to a few clusters, making it easier to control them. However, the third wave has spread rapidly and occurs in many clusters, making it difficult to control.

"The vaccine is still at the heart of containing the pandemic. The government has to accelerate vaccination to build immunities in as many groups as possible,” said Thanakorn.

The alcohol industry has been affected since the pandemic began.

In 2019, the alcohol industry had a total market value of about THB370 billion, close to the year 2018, which was a period of slight growth. However, since the Covid-19 outbreak in 2020, sales have dropped to just THB300 billion due to various factors, especially the lockdown measures, the nationwide ban on selling alcoholic beverages, tourist attractions being shut down due to lack of foreign tourists and the sluggish economy.

In April 2021, sales in restaurants and beverage shops, pubs and bars were severely affected. As a result, some operators had to close their business immediately and that indirectly affect others involved, such as suppliers, employees, singers, musicians, cooks, etc.

If the outbreak and the severity are controlled within the third quarter, the business sector will start to return to normal from October onwards. The fourth quarter is considered a high season for many businesses. The government should have a policy to stimulate purchasing power and the economy, Thanakorn said.

The Alcohol industry is expected to have a total revenue of about THB240-250 billion.

By the end of this year, it is expected that the market value of the entire industry will drop to only THB200 billion since the fourth quarter of the year is the peak period. If business does not return to normal, revenue will be down by THB40-50 billion, making it the lowest in more than 10 years of the alcohol industry, Thanakorn said.

“The most heavily affected alcohol at the moment is the premium group whose sales lost 70-80 per cent as consumers turned to other illegal channels for cheaper alcohol. For example, instead of brands priced at THB1,000-2,000 per bottle, they turned to drinks that were THB700-800 per bottle," said Thanakorn.

Published : May 23, 2021

By : The Nation