Alcohol regulations come under the spotlight at seminar

Their request follows a number of cabinet approvals, such as a tax cut on imported wines, which will soon be implemented.

Despite pulling back on any approval earlier this week, the government will again table the idea of extending alcohol sales hours to benefit the tourism industry. Currently, alcohol can only be purchased from 11am to 2pm, and from 5pm to midnight. The regulation applies to restaurants, local shops, supermarkets, and convenience stores across the country.

Speaking at a panel discussion about Thailand’s alcohol regulations on Thursday, Khemika Ratanakul, president of the Thai Alcohol Beverage Business Association, pointed out that there are still numerous challenges to doing alcohol-related business in the country.

She cited the government’s recent decision to approve a reduction in taxes on imported wines, adding that it is also considering changing the country’s alcohol labelling practices for imported wines and spirits.

The new label, she explained, will include a large photo of a car accident caused by drunk driving or a warning graphic designed to remind drinkers of the dangers of alcohol.

Though the proposal is full of good intentions, Khemika believes the effort is extremely uncivilised.

“Please consider business and marketing. Imagine a bottle of a 200,000-baht whisky or wine featuring this disturbing image. It is not only unattractive, but it also ruins the brand image of that whisky or wine’, she said.

Yanee Leoywanichialearn, secretary and executive member of the Night Restaurant Business Trade Association, agreed with Khemika, pointing out that there are many other creative options for warning both Thai and foreign drinkers, rather than simply forcing producers or importer to put a disturbing label on their products.

She noted that these optional actions necessitate more collaboration between the public and private sectors.

Rather than prohibiting people from drinking, it would be preferable to educate them on responsible drinking while cultivating the right mindset for a drinking culture, she said.

Meanwhile, she strongly urged the government to seriously consider lifting the afternoon alcohol sales ban, as the regulation has proven ineffective in preventing people from drinking. Instead, it has reduced the restaurants’ ability to earn more revenue.

“Most restaurants and bars are now opening before 5 pm in order to extend their business hours and increase revenue. However, they are unable to serve alcoholic beverages to their customers, especially foreigners who are used to relaxing with a glass of wine or a can of beer,” she explained. “This means less income for the restaurants.”

 

Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association (THA), added that while the government expected the country’s tourism and hospitality industry to generate 3.5 trillion baht this year by increasing tourist spending per person, some regulations, such as time restrictions on alcohol sales, have discouraged tourists from spending.

She pointed out that following the Covid-19 pandemic, the rapid recovery of Thailand’s tourism and hospitality industries is positively affecting for the country’s economy and restoring employment nationwide.

In order to maintain this positive momentum, it would be beneficial to have more supportive measures for the industry, she said, noting that new measures such as easing alcohol time sales would stimulate tourism and the hospitality businesses.

Still, she expressed her gratitude for the government’s efforts to reduce taxes on imported wines.

“Some of my guests complain that the prices of wines and spirits in Thailand are excessive. So, tax cuts would encourage more consumption and increase tourist spending,” Marisa said.

 

Rachada Wanichakorn, director of Tax Planning, Tax Planning Office, Royal Thai Excise, said that the Finance Ministry has issued measures to lower taxes on wine and community spirits, as well as to reduce the tax rate on nightlife or nightlife businesses from 10% of revenue to 5% for one year until the end of 2024.

The goal is to increase spending by both international tourists and Thais at all levels, thereby increasing the percentage of high-quality tourists in the long run.

Admitting that there are still gaps to be filled, she promised to continue discussions with the private sector in order to find the best solution that benefits both the country and businesses.

Meanwhile, she believed that lowering the tax on imported wines would allow the government to collect more revenue as wine consumption risen.

“Premiumisation” trend

The Thai government’s decision to reduce imported wine taxes has also received praise from the European Union and the Asia Pacific International Spirits and Wine Alliance (APISWA).

They pointed out that the move contributes to the trend of “premiumization”, in which tourists and consumers around the world are seeking more premium products and services even if they have to pay more.

APISWA director Davide Besana explained that the “premiumization” of consumer preferences represents a compelling economic opportunity for Thai and regional businesses to accelerate their recovery, growth, and diversification efforts. The trend is consistent with Thailand’s 4.0 strategy of pursuing high value-added growth to drive economic prosperity.

“We see international wine and spirits as playing an important role in supporting the premium hospitality and retail sectors, which also require a balanced and inclusive regulatory environment to thrive,” he said.

Their comments come after Thursday’s release of a study titled “International Wine and Spirits in ASEAN: The Economic Contribution of the International Wine and Spirits Value Chain in Thailand and Vietnam” by Oxford Economics, which was commissioned by APISWA.

The report’s purpose is to assess the economic impact of international wine and spirit sales and distribution in Thailand and Vietnam, two major Southeast Asian economies and tourism destinations.

According to Liam Cordingley, Oxford Economics’ lead economist, the results show that international wine and spirit sales and distribution make a significant economic contribution to Thailand, contributing US$198 million (6.9 billion baht) to GDP in 2022, up $24 million over 2021.

This supported 20,500 jobs and generated tax revenues of $292 million in 2022.

He added that “premiumization” would boost strategic economic objectives in Thailand, especially as Thailand seeks to attract high-spending tourists after the pandemic.

International wine and spirits form an integral ingredient of premium hospitality offerings, with “retail and food & beverage” found to be among the most important factors when affluent tourists consider where to book a holiday, second only to “health and safety”.

“Reducing wine taxes will increase demand for the product, which, according to our models, will boost the economy. So, you could expect higher GDP from wine sales, increased employment, or any of the other benefits mentioned in the report,” he said.

According to the report, in order to reap the most benefits from the “premiumization” trend, the government should work to create an accommodating business environment that promotes the development of domestic and international wine and spirits.

It also emphasises that increased demand for international wine and spirits will trickle down to domestic counterparts and the broader sector, resulting in a multiplier effect of new local business opportunities, high-value jobs, higher profit margins, and increased tax receipts in the hospitality and retail industries.

“We hope that the findings of this report will foster a better understanding of the gains made by our sector, as well as the need for greater collaboration among stakeholders to drive economic growth for domestic businesses, entrepreneurs, and the tourism and hospitality industries in order to meet the demand for more premium goods and services,” APISWA’s director noted.