Bad news for booze

PHUKET: The Excise Department’s tax increase on distilled spirits, which went into effect September 6, is gradually being reflected on store shelves across the island as retailers replace old stock with new.

The increase, which ostensibly has the twofold goal of cutting down on alcohol consumption and boosting government revenue, applies to all distilled alcohol products including brandy, whisky, “special blends”, rum, gin and vodka.

Distilled spirits are now subject to a tax of 40-50% of the market price, or 400 baht per liter of pure alcohol content – whichever is higher. Formerly the tax was 35-50% based on market price or 240 baht per liter of pure alcohol content.

The rise does not apply to beer and wine, which are still taxed at the old rate.

The announcement came after the recent mobile Cabinet meeting in Phang Nga and was prompted by data listed on a United Nations website which showed Thailand ranking fifth in the world in terms of per capita alcohol consumption, behind South Korea, the Bahamas, Taiwan and Bermuda.

At Tesco Lotus, the new tax formula has already resulted in price increases to several products, for example:

Starnovitch vodka: 225 baht to 232 baht; Kahlua liqueur: 899 baht to 919 baht; Malibu white rum: 739 baht to 759 baht; Clan MacGregor blended Scotch whisky: 279 baht to 283 baht; Camus cognac: 1,109 to 1,199 baht; Martell VSOP brandy: 1,199 baht to 1,269;

Wichan Meesen, Manager of the Market Place supermarket in Central Festival Phuket, said he did not believe the increase would have much effect on buying patterns.

“Even if they raised it to 500 baht per liter of pure alcohol, I think most of our customers would still have the spending power to continue buying what they want. Most of our customers are foreigners and price doesn’t seem to affect their behavior very much, so I don’t think this tax hike will affect us much,” he said.

The price increase has not gone completely unnoticed, however, he said. Overall sales in the shop increased about 20% during the past month as some customers came in to stock up on supplies while they are still available at the lower rate.