Future Forward Party pushes law to open beer production in Thailand in bottom-up economic approach

The Progressive Breweries and Distilleries Act was released by Thailand’s New Radical Politics Party on Tuesday by leader Thanathorn Juangroongruangkit. This is the brainchild of Bangkok Future Forward MP Pita Limcharoenrat who wants to open up the regulatory regime to give entrepreneurs the opportunity to thrive in a business that also holds promise for those working in agriculture.

Thailand’s Future Forward Party released a bill that would revolutionize alcohol production in Thailand and allow local craft beers to move manufacturing to Thailand, while opening up opportunities for thousands of entrepreneurs interested in what is. still a nascent market but which is growing rapidly.

Bangkok MP for Future Forward Pita Limcharoenrat was the main driver of the progressive brewery and distilleries law launched on Tuesday by party leader Thanathorn Juangroongruangkit.

On Tuesday, Thailand’s Future Forward Party introduced a bill that would liberalize Thailand’s brewing and spirits industries which the party says have become somewhat monopolistic.

The legislation was presented at a press conference in Bangkok by party leader Thanathorn Juangroongruangkit.

The progressive Brewery and Distilleries Act would effectively open up the brewing and distillation industry in Thailand by removing onerous requirements that currently prevent small commercial operators from brewing beer and producing spirits.

Previous government tightened sanctions against producers and sellers of commercial beer in Thailand

These measures appear to be the antithesis of the current policy and legal provisions of the Thai government.

Indeed, the previous government, under the Excise Tax Act of 2017, passed by the former National Legislative Assembly, strengthened the penalties provided for in the original law of 1950 for those who do not comply with legal requirements. .

These state, for example, that in order to operate a brewery for commercial purposes, a brewery must produce at least 10 million liters per year in volume and the minimum investment required is 10 million euros.

The Thai beer market dominated by two players

Currently, Thailand’s commercial or retail beer-making industry is dominated by two giants, each owned by wealthy Thai families.

The companies are very successful and produce popular Thai beers that have spread their reach and popularity far beyond the kingdom’s borders.

The first is Thai Beverage which produces the famous Chang beer then since 1933, the Boon Rawd Brewery which produces the two other favorite beers of the kingdom Singha and Leo.

Even large microbreweries in pubs must have an investment of 10 million yen under current laws

The only other way to produce beer commercially in Thailand, besides meeting the operating requirements of a licensed brewery, is to operate a large craft brewery within the confines of a pub that sells craft beers in his enclosure.

Even then, the required volume is 100,000 liters per year and an investment of 10 million euros is still required.

Bangkok’s future MP Pita Limcharoenrat behind the new bill to shake things up

The man running this new beer brewing and selling regime is future Future Forward MP Pita Limcharoenrat, who on Tuesday gave some examples of how the farming community and Thai entrepreneurs are being restricted by current law. .

Current law stifles investment and trust

Under the 2017 law, those who are even found in possession of an illegally brewed beer can be fined 10,000 yen while brewers and vendors face fines of 100,000 yen and 50,000 yen as well. only prison sentences.

The Audit and Enforcement Office of the Excise Department in Thailand does not provide figures on prosecutions.

It is admitted, however, that they are rare, but there has been activity against those who promote the commercial production of craft beers.

The law and its provisions, in and of themselves and by their existence, are sufficient to prohibit investment by business people seeking a return as well as to prevent entrepreneurs from building a viable business.

The old draconian law still hasn’t killed the craft beer trade and entrepreneurial activity

That didn’t kill Thailand’s momentum and enthusiasm for producing independent craft beers and products for the booming market, however.

This meant that serious commercial operators in the market had to outsource production to breweries in Cambodia, Australia, New Zealand, Vietnam and Taiwan and then re-import these products in full compliance with the law.

Current law makes craft beer in Thailand more expensive and hampers quality development

This makes new beers more expensive.

It also tends, according to beer production experts, to make it difficult for budding Thai brewers to perfect their recipes and production techniques, which is, according to those who know the industry, the secret to building a business. solid clientele.

Up to 100 brands in the market that would immediately benefit from this law if enacted

Currently, despite the fact that up to 100 new brands in the Thai market are selling legally and dozens of brewing companies are outsourcing production, the industry still accounts for less than 1% of the market.

However, it is a market that is growing according to trends all over the world.

Future Forward – initially estimate a 15-20 billion yen boost to the economy thanks to the new law

On Tuesday, Future Forward’s Mr Pita said that if his party’s proposed law passed, it would immediately generate up to an additional 20 billion yen for the Thai economy, in addition to more excise revenue for the government. Thai.

It is also an opportunity for Thai entrepreneurs and farmers to add crops to produce new authentic Thai products with crops that are only grown in the kingdom.

This is in addition to providing a level playing field for emerging operators and creating more competition within the industry.

“Community producers of alcoholic beverages will never be able to grow and compete with those manufacturers with billions of baht in capital. That is why we have developed this bill, ”said Pita.

Thai farmers exporting to Japan with processed product sold for 170 times the price

Mr. Pita gave the example of Thai Indica rice exported to Japan over the past 40 years.

He pointed out that more than 200,000 tonnes of the product had left the Thai shores sold for between 10 and 20 yen per kg. The harvest is used to brew Awamoro, an alcoholic beverage unique to Okinawa.

“The drink made in Japan is exported to Thailand at 2,500 baht per liter, or 170 times the price of the raw material,” said the deputy.

The Future Forward representative said he had identified 70 beer brands that are already on sale in Thailand that would thrive and grow under the new law if passed by the House of Representatives.

New law would also help preserve traditional drinks and Thai heritage in key regions

He also spoke about the importance of preserving drinks and products that are unique to regions of Thailand and are part of Thai culture and tradition.

Mr. Pita gave an example of Lao Sa-iap liquor in the northern province of Phrae, which generates sales of 1 billion yen per year and generates excise revenue of 400 million yen.

3,000 community producers

He pointed out that there are 3,000 community alcohol producers in Thailand who would not only become legal but start paying taxes, but only if the new Future Foard provision comes into effect.

Clear reform demand from Thai entrepreneurs already outsourcing beer brewing overseas

The demand for reform in this area is clear.

Despite onerous government law, Thai entrepreneurs are already operating in the market using outsourcing to stay legal.

In addition to removing daily quality control from the hands of Thai brewers by outsourcing to countries such as Australia and Taiwan, it is difficult for Thai beers to use genuine and original ingredients from Thailand.

In one case, a Thai beer brewed in Australia had to use pasteurized mango because the Australian brewer was concerned that real mango could cause infection in its beer products.

Thai beer brewery established in Koh Kong province in Cambodia near Trang province

Stone Head Brewery was established in Cambodia located a short distance from the Thai border near Trang in Koh Kong. It was created by Thai businessmen with substantial investment to meet the growing demand for more established Thai craft beers.

It can brew up to 3000 liters of beer per day and works with a range of Thai beer brands to keep its brewing facilities occupied.

Phnom Penh Kingdom Breweries is a thriving production center for Thai craft beers

A Cambodian brewing company, Kingdom Breweries in Phnom Penh, established in 2009, is now a thriving business serving not only Thai craft beers, but also similar operators in Southeast Asia from Hong Kong, the Philippines and from Singapore.

The brewing center currently produces 30 craft beers, many from Thailand.

Business opportunity for Thailand with a new bottom-up approach to the economy

The current situation obviously represents a waste of opportunity for Thailand and one that the Future Forward party bill aims to open and seize.

The bill effectively proposes a bottom-up approach to the economic development of this industry.

This contrasts sharply with the current government’s emphasis in both this sector and others, on a top-down approach, relying on large established companies with access to capital or foreign investment from large international companies, many of which are already dominant players in their markets. .

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