House Bill Aims to Increase Liquor Production Opportunities
The House of Representatives on Wednesday passed a bill to promote liquor production by small entrepreneurs, a move that Prime Minister Paetongtarn Shinawatra said would loosen the grip of Thailand’s alcoholic beverage oligopoly and support the rural economy. The Community Liquor Bill will pave the way for individual entrepreneurs, cooperatives, and farmers’ groups, among others, to secure licenses to produce and trade all types of liquor. It received near-unanimous approval with 415 lawmakers out of 420 present voting in its favor. The legislation will now be forwarded to the Senate for its consideration.
Microbreweries and small distilleries may eat into the market share of the Thai Beverage and Boon Rawd Brewery duopoly that have dominated Thailand’s beer and spirits industries for decades. An easier licensing regime might also be a boon for restaurants and pubs in developing niche alcoholic beverages to cater to the millions of foreign tourists visiting the country annually. Domestic alcoholic drink sales in Thailand totaled 2.97 billion liters valued at $16.3 billion in 2023, according to a report by Krungsri Research. Beer accounted for about 55.8% of the total value and spirits 36.1%, it said.
Once parliamentary approval is in place, several ministerial regulations will need to be issued before authorities can begin issuing permits, said Chanin Rungtanakiat, a member of the governing Pheu Thai Party who chaired a panel steering the bill. The bill could come into effect by October if the Excise Department and related agencies issue rules in a timely manner, according to Taopiphop Limjittrakorn, a member of the opposition People’s Party, who has led a years-long campaign to dismantle liquor monopoly.
While some of the ideas that Mr. Taopiphop and his party championed were incorporated into the Pheu Thai-sponsored bill that was passed on Wednesday, he said he would continue to push what he has called the Progressive Liquor Bill. In a post on X, he noted that Wednesday marked 2,917 days since his arrest for making craft beer at home, almost eight years ago. The 35-year-old Bangkok opposition MP was also effusive in his praise for his Pheu Thai peer, who worked hard to bring the bill into being. “We are both about the same age. We happened to be responsible for similar issues, so we often worked together and talked about it together,” Mr. Taopiphop wrote. “I have nothing but respect for this colleague from another party.”
Boon Rawd, the country’s first brewery founded in 1933, is owned and controlled by the Bhirombhakdi family, the country’s 19th richest, according to Forbes magazine. ThaiBev was founded by Charoen Sirivadhanabhakdi, ranked by Forbes as the country’s third-richest person with a net worth of $10 billion. Boon Rawd controlled a 57.9% share of Thailand’s beer market followed by ThaiBev at 34.3% and Thai Asia Pacific Brewery at 4.7%, according to a February 2022 report by Krungsri Research. ThaiBev was also the runaway leader in the spirits market with a 59.5% share, with the second-place player holding only 8% of the segment, the report said.
People’s Party MP Taopiphop Limjittrakorn, who was arrested eight years ago for brewing craft beer, has campaigned for years to dismantle Thailand’s beer and liquor duopoly. (Photo: Reuters)
Alcoholic Beverages Market Impact
The passage of the Community Liquor Bill is set to shake up the alcoholic beverages market in Thailand, with small entrepreneurs and community producers poised to enter the industry and compete with established players.
Challenges and Opportunities
While the bill opens up opportunities for new entrants, it also poses challenges to the existing duopoly of Thai Beverage and Boon Rawd Brewery. The move is expected to diversify the market and cater to changing consumer preferences.
Rural Economy Boost
With the focus on supporting rural entrepreneurs, the bill is seen as a step towards bolstering the rural economy and empowering small-scale producers to thrive in the competitive liquor industry.