Alcohol regulations come under the spotlight at seminar

She pointed out that following the Covid-19 pandemic, the rapid recovery of Thailand’s tourism and hospitality industries is positively affecting for the country’s economy and restoring employment nationwide.

In order to maintain this positive momentum, it would be beneficial to have more supportive measures for the industry, she said, noting that new measures such as easing alcohol time sales would stimulate tourism and the hospitality businesses.

Still, she expressed her gratitude for the government’s efforts to reduce taxes on imported wines.

“Some of my guests complain that the prices of wines and spirits in Thailand are excessive. So, tax cuts would encourage more consumption and increase tourist spending,” Marisa said.

Rachada Wanichakorn, director of Tax Planning, Tax Planning Office, Royal Thai Excise, said that the Finance Ministry has issued measures to lower taxes on wine and community spirits, as well as to reduce the tax rate on nightlife or nightlife businesses from 10% of revenue to 5% for one year until the end of 2024.

The goal is to increase spending by both international tourists and Thais at all levels, thereby increasing the percentage of high-quality tourists in the long run.

Admitting that there are still gaps to be filled, she promised to continue discussions with the private sector in order to find the best solution that benefits both the country and businesses.

Meanwhile, she believed that lowering the tax on imported wines would allow the government to collect more revenue as wine consumption risen.

“Premiumisation” trend

The Thai government’s decision to reduce imported wine taxes has also received praise from the European Union and the Asia Pacific International Spirits and Wine Alliance (APISWA).

They pointed out that the move contributes to the trend of “premiumization”, in which tourists and consumers around the world are seeking more premium products and services even if they have to pay more.

APISWA director Davide Besana explained that the “premiumization” of consumer preferences represents a compelling economic opportunity for Thai and regional businesses to accelerate their recovery, growth, and diversification efforts. The trend is consistent with Thailand’s 4.0 strategy of pursuing high value-added growth to drive economic prosperity.

“We see international wine and spirits as playing an important role in supporting the premium hospitality and retail sectors, which also require a balanced and inclusive regulatory environment to thrive,” he said.

Their comments come after Thursday’s release of a study titled “International Wine and Spirits in ASEAN: The Economic Contribution of the International Wine and Spirits Value Chain in Thailand and Vietnam” by Oxford Economics, which was commissioned by APISWA.

The report’s purpose is to assess the economic impact of international wine and spirit sales and distribution in Thailand and Vietnam, two major Southeast Asian economies and tourism destinations.

According to Liam Cordingley, Oxford Economics’ lead economist, the results show that international wine and spirit sales and distribution make a significant economic contribution to Thailand, contributing US$198 million (6.9 billion baht) to GDP in 2022, up $24 million over 2021.

This supported 20,500 jobs and generated tax revenues of $292 million in 2022.

He added that “premiumization” would boost strategic economic objectives in Thailand, especially as Thailand seeks to attract high-spending tourists after the pandemic.

International wine and spirits form an integral ingredient of premium hospitality offerings, with “retail and food & beverage” found to be among the most important factors when affluent tourists consider where to book a holiday, second only to “health and safety”.

“Reducing wine taxes will increase demand for the product, which, according to our models, will boost the economy. So, you could expect higher GDP from wine sales, increased employment, or any of the other benefits mentioned in the report,” he said.

According to the report, in order to reap the most benefits from the “premiumization” trend, the government should work to create an accommodating business environment that promotes the development of domestic and international wine and spirits.

It also emphasises that increased demand for international wine and spirits will trickle down to domestic counterparts and the broader sector, resulting in a multiplier effect of new local business opportunities, high-value jobs, higher profit margins, and increased tax receipts in the hospitality and retail industries.

“We hope that the findings of this report will foster a better understanding of the gains made by our sector, as well as the need for greater collaboration among stakeholders to drive economic growth for domestic businesses, entrepreneurs, and the tourism and hospitality industries in order to meet the demand for more premium goods and services,” APISWA’s director noted.