DBD finds 15 fruit-packing firms suspected of using Thai nominee shareholders

Poonpong Naiyanapakorn, Director-General of the Department of Business Development (DBD), said the department had convened a meeting with 10 relevant agencies to discuss ways to address falling aromatic coconut prices and examine foreign-backed groups operating fruit-packing businesses.

The meeting also gathered information and reflected concerns over management issues across the entire supply chain.

Particular attention was given to problems involving foreign capital groups allegedly operating unlawfully, including fruit-packing registration, labour use, tax avoidance, and business practices that may have penetrated the upstream, midstream and downstream segments of the industry, while jointly depressing farm-gate prices unfairly.

The agencies agreed to conduct in-depth investigations and strictly enforce the law within their respective mandates to ensure fairness for farmers and legitimate business operators.

Initial checks found 15 legal entities in the high-risk fruit-packing group suspected of using Thai nationals as nominee shareholders. Of these, 11 were in Ratchaburi, while Samut Prakan, Pathum Thani, Samut Sakhon and Bangkok each had one company.

Ten Thai nationals are believed to have supported these firms, acting as shareholders or directors. Some of the companies had been established for five to six years, while others were newly formed.

Following the findings, the DBD referred the matter to the relevant authorities for action within their powers, namely the Central Investigation Bureau (CIB), the Department of Special Investigation (DSI) and the Anti-Money Laundering Office (AMLO).

If wrongdoing is confirmed, penalties under the Foreign Business Act BE 2542 (1999) include up to three years’ imprisonment and fines ranging from 100,000 to 1 million baht.

The department also identified another 10 Thai individuals believed to have supported these high-risk nominee firms. Their names and related information have been forwarded to the CIB and DSI for further in-depth investigation.

Poonpong went on to say that the department had conducted a comprehensive analysis of the Thai aromatic coconut industry, covering upstream, midstream and downstream operations, to identify the causes of sharp price fluctuations. It found that the main problems stemmed from production structure, marketing and competition across four key areas.

First, the Thai aromatic coconut supply chain divides produce into two sizes: export-standard coconuts, which fetch about 4 to 5 baht per fruit at farm-gate level and weigh more than 1 kilogram after trimming, and substandard coconuts, which are smaller, underdeveloped and unsuitable for export, with a farm-gate price of around 2 baht each.

The supply chain begins with farmers, who sell produce directly at retail, through middlemen, or to factories. Factories then sort and trim the fresh fruit. Export-standard coconuts are shipped overseas or sold domestically through wholesale markets, retail outlets and department stores.

Substandard coconuts are processed instead, such as being drilled for coconut water drinks or used as ingredients in food and desserts. At present, only around 30% of aromatic coconuts meet export standards, while about 70% of total output is substandard.

Second, the industry faces structural problems. Agricultural planting areas expanded rapidly from 235,903 rai in 2021 to 305,706 rai in 2025, causing output to surge from 532,942 tonnes to 877,681 tonnes, an increase of nearly 50%. This has led to oversupply.

At the same time, export value has declined continuously, from 9.88 billion baht in 2023 to 6.45 billion baht in 2025. With supply exceeding demand, prices have fallen, farmers’ incomes have dropped, and many have struggled to maintain their orchards, resulting in lower product quality.

In export markets, Thai factories face legal compliance costs relating to standards and taxation, making them less competitive on cost. Meanwhile, foreign buyers have slowed orders, and some have switched to rival countries offering lower prices. As a result, Thailand’s market share in China, its main export market, fell from 75% to about 48%.

There is also increasing competition from foreign capital and nominee-backed operators investing across the whole chain, from leasing orchards and factories to packing and exporting. This allows them to control purchase and selling prices, while some benefit from lower costs by failing to comply fully with required standards.

In the processing sector, adulterated products have also been found, such as coconut water mixed with sugar, added flavouring or juice from other coconut varieties but labelled as 100% aromatic coconut water. This misleads consumers and damages the image of Thai aromatic coconut products.

Third, the aromatic coconut industry is facing four major crises: shortages that drive prices too high and undermine competitiveness; oversupply that pushes prices down and leaves factories with excess stock; low-cost competition from foreign capital; and adulterated products that affect the quality and pricing of Thai coconuts.

Fourth, in terms of short- and medium-term solutions, the agricultural sector should introduce a planting-area management system to prevent oversupply, while also providing financial support for farmers to maintain orchards and improve product quality.

In the production sector, the government must enforce the law fairly, inspect factory standards, environmental compliance, labour practices, shareholder structures and purchase pricing to ensure fairness for operators.

At the same time, product standards must be better organised, including separate customs classifications for 100% pure coconut water and blended coconut water, as well as stronger action against counterfeit products to protect genuine goods.

On the marketing side, it is necessary to retain existing export markets, expand into new ones and revive sluggish markets in order to increase orders and reduce long-term market concentration, while also promoting domestic consumption.

Poonpong said the latest analysis of the aromatic coconut industry had made problems across the entire production chain much clearer. Current farm-gate prices, he said, remain insufficient to support farmers’ livelihoods, making it necessary to investigate price structures from origin to endpoint. If exploitation is found, strict legal action must follow.

For aromatic coconuts that do not meet export standards, the Commerce Ministry is accelerating efforts to create more domestic distribution channels, including opening additional sales points in various areas and promoting their use in processing and other activities to add value and help support prices.