Small breweries and local distilleries are hopeful of a bright future if the Move Forward Party forms a coalition government and pushes changes to liberalise the alcohol industry as promised.
Despite clear economic opportunities from diversifying craft beers and in the speciality spirits market, small businesses have been struggling to survive, let alone thrive, in Thailand’s heavily monopolised alcohol industry, due to harsh laws and regulations controlling production and retailing.
The party’s MP in Bangkok’s Constituency 22, and its leading liquor liberalisation campaigner, Taopiphop Limjittrakorn, told the Bangkok Post that amending these laws to promote fairer competition for small enterprises and break the liquor industry monopoly will be one of the first things the party will push in parliament.
“Our first step will be to amend the ministerial regulations on liquor production, which can be done within the first week of the first parliamentary session to unlock the remaining barriers preventing small-scale distilleries from entering the business,” Mr Taopiphop said.
“We’re now opening dialogue to discuss other issues such as excise rate changes and loosening alcohol control rules to reach a consensus on solutions to these issues since they require the amendment of other related acts, which needs more preparation and takes more time.”
Sore points
As the co-founder of Sandport Brewery, a small craft brewery in Chatuchak district, Supapong Pruenglampoo is one entrepreneur directly affected by the restrictive rules, which he claims were written heavily in favour of the giant conglomerates and designed to put off small firms from entering the industry.
“The first obstacle every newcomer in the brewing business had to face was meeting the demanding criteria for registering a business licence,” Mr Supapong said.
The system required applicants to have at least 10 million baht of registered capital and a minimum production capacity of 100,000 litres per year to get a licence for brewpubs, while a minimum production capacity of at least 10 million litres per year was needed to qualify for a bottled beer manufacturing licence.
Despite these rules for craft brewery registration having been lifted in 2022, the criteria for distilled spirits remain the same, as they require a minimum production capacity of 30,000 litres per day to gain a licence for distilled spirit production.
“This is the first high barrier that keeps small entrepreneurs with limited resources out,” he said.
Also, he said microbreweries are taxed at the same high rate as the big beer companies at 22% of the retail price, despite the production costs of microbreweries being incomparably higher.
This forces small craft beer brewers to sell their products at a much higher price than mass-produced beers.
“Microbrewers are also regulated by strict rules under the Alcoholic Beverage Control Act that prohibit us from advertising and selling our products online, and we are subjected to similar fines as the big brands of up to 500,000 baht if found violating the rules,” he said.
“So, we are happy to hear that Move Forward plans to push the liquor liberalisation policy since we want competition under fair rules.”
Thanakorn Tuamsa-ngiam, founder of Prachachon Beer (Beer People), a social network group advocating for liquor liberalisation, said the enforcement of laws is also a major problem.
“When enforcing alcohol control rules, officials often overlook the misdeeds of big companies and instead focus on prosecuting small business owners. They can interpret the law in a way to penalise small businesses and ordinary people deliberately,” he said.
“I myself am a victim of such actions, as I was prosecuted for violating the Alcoholic Beverage Control Act by advertising alcoholic beverages online, even though I only posted educational articles about craft beer on the Prachachon Beer Facebook Fanpage.”
Opportunities ahead
Despite the law discouraging small liquor enterprises, Mr Thanakorn said more people are interested in homebrewing and setting up their own businesses, which aligns with global trends in an alcohol industry which is diversifying.
“Thailand has diverse agricultural products that can be bases for developing craft beers and speciality spirits. With support from authorities, we can be a global hub for craft beer tourism, which can lift the economy and boost tourism,” he said.
“We also need technical and innovative support on brewing craft beers and distilling speciality spirits since, despite our rich biodiversity resources, we still rely on imported materials. So, we also hope to collaborate more with researchers and academics.”
Meanwhile, one booze tycoon, Piti Bhirombhakdi, a director of Boon Rawd Brewery Ltd and a fourth-generation scion of the Singha Beer corporate empire, says he also supports MFP’s bid to liberalise the liquor industry.
Although the policy is aimed at countering the dominance of the big beer companies and promoting small businesses, Mr Piti said he does not have any problem with new competitors in the market. Instead, he says this is a great opportunity for Singha Beer to evolve, diversify and adapt to the changing market landscape.
“Sure, there will be more intense competition for market share, but this is a normal thing in the free market. I also believe liquor liberalisation will bring much greater benefits to our company and the industry,” Mr Piti said.
Despite the Move Forward Party’s policy receiving support from stakeholders in the alcohol industry, some medical experts are concerned over the possible social impacts that easier access and possibly higher alcohol consumption could bring if controls are loosened.
“I agree liquor liberalisation can help boost the economy and support small local businesses, but the strict laws controlling the advertising and sale of alcohol are also important to prevent adverse impacts on public health and society from irresponsible drinking,” Dr Udomsak Saengow, director of the Research Institute for Health Sciences at Walailak University, said.