Will new bill finally pop the cap on Thailand’s booze oligopoly?
Widely dubbed the “Progressive Liquor Bill”, a new draft law on excise tax is tipped to revolutionize Thailand’s alcohol industry if it sails through Parliament untouched.
Thailand’s booze market is now worth about Bt260 billion, but in normal times before the arrival of COVID-19 it weighed in at a whopping Bt370 billion in 2019.
Critics have complained for years that the market is monopolized by a handful of giant producers because Thai laws favor big investors. For instance, beer manufacturers are required to have at least Bt10 million in registered capital.
Meanwhile brewpubs – manufacturers that also sell their craft beer – must produce at least 100,000 liters a year. And under current rules, factories must produce a minimum of 10 million liters per year. Similar regulations apply to manufacturers of spirits.
Though the existing community liquor law allows small-scale production, its rules require these operations to be very small – manufacturing equipment must be no more than 5 horsepower and the workforce cannot exceed seven staff.
Freer, fairer market
Move Forward Party MP Taopiphop Limjittrakorn has been determined to free up the alcoholic beverage market since he was arrested for making and selling craft beer without a license in 2017. Back then he was just 28, a young entrepreneur trying to start a business.
“While changes in society come from the behavior of the masses, we can also push for change through law,” said the graduate of Thammasat University’s Law Faculty.
Seeking to make legal changes in Parliament with a political party behind him, he joined Future Forward Party, which has now reincarnated as Move Forward.
Taopiphop made his stance clear from the very beginning. While canvassing for votes under the Future Forward banner in 2019, he launched a door-to-door campaign to explain his crusade to the public.
His idea obviously impressed many voters; despite being a new face in politics, Taopiphop won by a landslide in Bangkok’s Constituency 22.
Soon after entering Parliament, he proposed the new Excise Tax Bill on May 29, 2020, aiming to end the oligopoly in Thailand’s booze market.
What does the draft say?
The bill is simple and brief, containing just seven articles. If passed, it will remove the complicated rules on manufacturing capacity, number of staff members, and production horsepower.
In effect, the new law will make it easier for people to brew booze either for themselves or for sale via a small enterprise or brewpub.
The legal changes will even allow villagers to use their local wisdom to create signature brews, helping spur tourism and benefiting people working further down the supply chain. The profits may also be extended to the agricultural sector via ingredients such as rice or wheat.
What chance of legislation?
The idea of the “Progressive Liquor Bill” may please many, especially those who like a tipple, but it has not won overwhelming support on the floor of Parliament.
When the draft law was first considered on February 9 this year, it failed to gain approval in principle. Instead, MPs voted 207:195 with two abstentions and two no-votes to have the Cabinet review the bill first.
The Cabinet has 60 days to consider the bill before it is submitted to Parliament for debate and voting.
Will the bill be scrapped?
Taopiphop has expressed concern that the Cabinet may end up scrapping the bill, especially if the review period includes behind-the-scenes negotiations with big business.
“The situation needs to be closely monitored,” he said.
Taopiphop added that if the bill does not sail through under this government’s tenure, he hopes voters will give his party a landslide victory so he can continue his push for liberalization of the alcohol market.
By Thai PBS World’s General Desk