Effective on midnight last night, the new effective tax rates on beer, wine and liquor have been approved by Cabinet. Alcohol tax will be in two parts; product value tax and alcohol content tax.
For drinkers and related shareholders
A. Beer: price will increase by about 3-7 baht per bottle and 2-3 baht per can, maximum tax remains at 60% of product value, effective tax rate per litre of pure alcohol rose to 300 baht from 100 baht before.
B. Wine: Product value below 600 baht exempt from product value-based tax. Product value above 600 baht taxed at 36% of retail value. All wine taxed at 1000 baht per litre of pure alcohol, up from 100 baht.
C. Liquor: price will increase by about 7-15% depending on type and alcohol content, more details to be revealed. Price increase for imported whiskey is noted.
The impact may be minimal for cheap booze as the cost of a bottle of Singha or Chang in Thailand will still be lower than beer in other countries, especially most of the ones where tourists to Thailand come from. Globally, Thailand is still more affordable than many other countries with regards to alcohol prices, especially Singapore, which should be around the highest. If we are looking only at the particular group of booze-hunting tourists, then it is possible that they will just skip Thailand for Laos, Cambodia or Vietnam to stretch their alcohol dollars further. The folks concerned about ''reduced purchasing power'' of farmers and all, affecting sales of spirits may possibly see those farmers and rural drinkers brew their own instead!
Let me do a rough calculation here;
A 660 ml bottle of Chang beer costs roughly 50 baht. It has 6.4% alcohol content. Tax ceiling of 2000 baht per litre of alcohol content.
6.4% of 660ml gives us 44.24ml of alcohol, times 2 baht per ml alcohol content
44.24 x 2 = 88.48 baht alcohol tax on Chang Beer.
Lets compare this to a 5% alcohol content Singha beer.
5% x 660 ml = 33 ml x 2 baht/ml = 66baht alcohol tax on Singha Beer.
Singha currently is more expensive than Chang at about 60 baht per bottle. With the maximum tax imposed, a bottle of Chang could cost 138.48 baht and a bottle of Singha, 126 baht.
This would create a scenario whereby Singha becomes the cheaper option whereas it used to be the premium brand. It will be very possible for Chang to lose more market share to Singha. However with all things equal, after tax, the higher alcohol content beer demands a higher price.
As yet, many things are still not yet certain regarding the tax changes, the final price of your bottle of beer would likely be increased at a gradual pace towards the ceiling instead of a large one-time increase. Thus, if we believe the figures estimated by official sources, beer will most likely rise by only 3-7 baht per bottle this time round. Do note that tax revisions can come at any time in this country.
For coffee shop chatterbugs or political-showbiz watchers
''I want to assure you the tax restructuring for alcohol beverages is not aimed at boosting state revenue, but is aimed at reducing the number of alcohol drinkers. More importantly, we hope alcohol consumption will reduce during this Buddhist Lent period.'' - Finance Minister Kittiratt Na-Ranong
If he just said plainly that the tax rise was to increase state revenue and also to pay for mouldy rice, I would gladly buy the man a Chang!
It is strangely interesting when I look at them and see the right pocket in, left pocket out policies in Thailand and then realize how familiar it is to me.