Move Forward’s challenge to liquor titans is okay with senior tax official
The Excise Department is unopposed to the Move Forward Party’s plan to liberalise liquor production so that small producers can compete in a market dominated by titans, a deputy chief of the department said on Wednesday.
“If Move Forward leads the next coalition government and goes ahead with the plan, the department will have no objection,” said Kriengkrai Pattanaporn, deputy director-general of the Excise Department.
Craft beer makers are, however, an exception.
Manufacturing of craft beer needs to be considered prudently because it could pollute the environment, Kriengkrai explained.
Move Forward tried but failed to pass its progressive liquor bill when it was an opposition party during the last tenure of the House of Representatives.
It promised during the election campaign to push the bill through the House if it won the election.
The bill aims to eliminate constraints that prevent small distillers from competing against the liquor titans who have dominated the Thai market for decades.
Currently, there are two categories of liquor distillers – community and major distillers, Kriengkrai said.
He said the Cabinet of outgoing Prime Minister Gen Prayut Chan-o-cha resolved last November to allow medium-sized liquor makers, creating three levels of manufacturing.
However, no mid-sized liquor makers have registered with the Excise Department since the resolution was issued, Kriengkrai said.
The three categories are divided by the capacity of their boilers. A maker using no more than five horsepower boilers is categorised as a small distiller. One whose boilers range from five to 50 horsepower is classified as a mid-sized distiller, while those with boilers that operate at more than 50 horsepower are large distillers.
There are over 1,000 small or community distillers and only a few larger ones, Kriengkrai said.
It is unlikely that new major distillers will enter the Thai market because it is not expanding and its value has remained at about 400 billion per year for a long time, he said.
“It is not worthwhile for new major players to invest in the market because its value is static,” Kriengkrai said.
The Thai liquor market has not expanded because it is illegal to advertise alcoholic drinks, he added.
The Excise Department would welcome new major distillers because it would earn more revenue from them, Kriengkrai said.
The beer market is dominated by major manufacturers because the Excise Department cannot
approve manufacturing by small players due to environmental concerns, he said, adding that beer making can pollute natural water resources.
Beer makers need a license to operate a factory from the Industry Ministry due to environmental risks, he said.
During the first seven months of fiscal 2023, which began last March, the Excise Department collected 40.3 billion baht in taxes from liquor sales, a 10% increase from the same period in fiscal year 2022. The increase was mainly due to the reopening of pubs and bars after the Covid-19 pandemic.
The department received 54 billion baht in tax revenue from beer sales during the period, an increase of 3% year on year, Kriengkrai added.
