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Home ASIA Thailand

Beer-loving Thai lawmaker takes aim at US$14 billion booze industry duopoly

May 24, 2023
in ASIA, Thailand
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Beer-loving Thai lawmaker takes aim at US$14 billion booze industry duopoly
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BANGKOK – A beer-loving lawmaker in Thailand once arrested for illegal brewing is hoping his party’s election win can give him a long-awaited shot at breaking up a US$14 billion alcohol duopoly of two of the country’s wealthiest families.

Brewer-turned-politician Taopiphop Limjittrakorn has been fighting to overhaul strict regulations for years, taking on Boon Rawd Brewery and ThaiBev, which have long had a stranglehold on the production of alcohol.

He is a member of the progressive Move Forward party, which is pushing to form the next government after winning the most seats in a May 14 general election. It reached an agreement on Monday (May 22) with prospective coalition partners that include measures to “abolish monopolies and promote fair competition in all industries, such as alcoholic beverages”.

Although the single-largest party, the prospect of a Move Forward-led government is still uncertain due to a built-in constitutional provision that favours military-linked parties.

“The progressive alcohol bill is not only a bill, it is a political project,” said Taopiphop, 34, who was re-elected in a Bangkok district, in an interview at his bar.

“Now, I’m gathering all the stakeholders in this policy to make it happen as smoothly as I can because I realise that we are not the opposition any more. We are government.”

Boon Rawd, which makes Singha and Leo beers, and ThaiBev, the brewer of Chang beer, did not immediately respond to questions from Reuters.

Boon Rawd, Thailand’s first brewery founded in 1933, is privately owned and controlled by the Bhirombhakdi family, the country’s 15th richest, according to Forbes. ThaiBev was founded by Charoen Sirivadhanabhakdi, ranked by Forbes as Thailand’s third-richest person with a net worth of $14 billion.

If Move Forward is able to lead the government and open up the alcohol sector, the two companies may see short-term effects on their performance because of new competitors, said Damien Yeo, Consumer and Retail Analyst at research firm BMI.

“Over the long run, both ThaiBev and Boon Rawd have plenty going for them that will help them maintain a healthy lead over any potential new competitors,” Yeo said, pointing to both firms’ better understanding of the market and regulatory issues.

‘Not an extremist’

More than half of Thailand’s alcoholic drinks market, valued at about 473 billion baht (S$18.4 billion) in 2020, is beer.

Boon Rawd controls a 57.9 per cent share of the beer market followed by Singapore-listed ThaiBev at 34.3 per cent and Thai Asia Pacific Brewery at 4.7 per cent, according to a February 2022 report by Krungsri Research.

ThaiBev is also the run-away leader in the spirits market with a 59.5 per cent share, with the second-place player holding only 8per cent of the segment, according to Krungsri Research.

Through an amendment to the excise laws, which failed to make it through parliament previously, Taopiphop said he was aiming to remove high-entry barriers for the alcohol industry that largely favour big firms like Boon Rawd and ThaiBev.

The aim would be help small domestic brewers gain at least 10 per cent of the beer market within a decade, said Taopiphop.

In a social media post on May 19 after Move Forward’s election win, Piti Bhirombhakdi, who is on the board of Boon Rawd, said he backed the liberalisation of the industry.

“There will be some impact but in free trade we have competition. We will have to adjust our plan,” he said in reply to a comment on Facebook.

On a May 12 earnings call, ahead of the polls, a ThaiBev executive said the company was alert for new regulations. The company’s stock is trading at its lowest level since early November.

“We’ve been watching this closely for each party, and what is their policy,” said Senior Executive Vice President Ueychai Tantha-Obhas said. “We just prepare for any outcome.”

A lawyer who became a tour guide before turning to brewing, Taopiphop said he planned to follow up on regulatory easing with further legislation on rationalising restrictive alcohol advertising and allowing 24-hour alcohol sales.

“I’m not an extremist,” said Taopiphop. “I want to drink good beer.”

This article was first published in Asia One . All contents and images are copyright to their respective owners and sources.

Tags: #alcohol#BEER#Business#market Share#politiciansThailand
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