Booze News

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The following appears in THE NATION:

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Will Drinkers Toast New Liquor Tax?

 

December 24, 2009

 

Excise tax ceiling to be raised; foreign beers, liquors will be subject to a zero import duty under Afta scheme

 

An executive decree will be issued shortly to raise the excise tax ceiling on alcoholic beverages in preparation for the implementation of the Asean Free Trade Area (Afta) on January 1, a source from the Finance Ministry said yesterday.

 

The Cabinet is expected to consider the measure on Tuesday, just before the arrival of 2010 when all imported beer and liquor will be subject to a zero import duty under the Afta scheme.

 

Finance Minister Korn Chatikavanij yesterday declined to comment on the planned excise hike.

 

However, official sources say the excise ceiling on beer, for instance, is expected to rise from Bt100 to Bt460 per litre based on alcohol content, while that of distilled white spirits and whisky will rise from Bt120 to Bt400.

 

PREVENTING DUMPING

 

The planned hike should help prevent cheaper foreign-made alcoholic drinks being dumped in the Thai market once liberalisation is in place.

 

"Alcoholic beverages damage consumers' health, so it's necessary to use the excise tax as a measure |to manage consumption. Competition in the alcohol industry should also be curbed because fiercer competition as a result of market liberalisation will lead to more consumption.

 

"In addition, the government should enforce a law banning the advertisement of these products to prevent further damage to public health," said a ministry official, who asked not to be named.

 

Under the Afta scheme, Thailand and other Asean countries will be opening up their domestic markets to boost trade within the 10-country grouping.

 

From January 1, several types of products - including alcohol - will benefit from the zero import tax rate, allowing an influx of cheaper beer and liquor from within the region.

 

At present, Thailand is the largest market for alcoholic beverages in Asean, followed by the Philippines and Vietnam.

 

Sources say Chinese beverage firms with production facilities inside Asean are expected to flood the Thai market with cheap beer and liquor. In addition, some European firms are already using production facilities within Asean to supply low-cost products to the Thai market.

 

If the excise tax ceiling does not get adjusted before Afta is enforced, Thai producers will be hit hard by the dumping of foreign products.

 

Beside beer, competition in the distilled white spirits and whiskey market segments is also expected to be fierce due to the reduction of import duty.

[kokopelli]

So they give with one hand and take with the other? I had hoped that some good Australian wine could be had at a reasonable price but that may not be the case. Wine is somthing that the average Thai does not drink and no one who drinks wine would drink Thai wine.

[Guest fountainhall]

Since 1990 I have been collecting young wines which are stored for me in England. The aim was to start shipping them over around 2002 so that I would have a nice supply of good wines to drink once I moved here. Sadly the government has never repealed the monstrous hike in tax rates for imported wine imposed in the austerity measures of 1997. It is therefore impossibly expensive to bring them over and I have had to sell almost all of it. I totally fail to understand the logic of taxes of well over 100% on any kind of wine, let alone good wine, when the government's objective seems to be to cut down on alcohol consumption. It beggars belief that the tax on wine is vastly higher than the tax on spirits.