Published on January 18, 2006

Companies would divert money saved into cutting prices: industry players. The Public Health Ministry’s plan to ban alcohol advertising in all media 24-hours-a-day would leave the advertising industry seriously woozy and likely losing out on Bt2.6 billion in liquor-company advertising per year.

The ban could also lead to heavy price-cutting campaigns by new and existing alcohol players which would divert their huge ad budgets into price cuts, thereby stimulating more alcohol consumption, according to industry players.

Kasemsant Weerakun, spokesman for Thai Beverage, said that the company would follow any regulations and controls imposed by the authorities as long as they are applied equally and fairly to all alcohol firms.

“Those regulations will affect not only alcohol companies, but also other related industries such as the advertising and media industries and also entertainment spots including restaurants, pubs and bars,” Kasemsant said.

Kasemsant said that the government should study other countries that have successfully promoted safe drinking campaigns, such as anti-drunk driving and anti-underage drinking efforts, without issuing tough regulations and controls. Such campaigns were pulled off with close cooperation between the government and the private sector by encouraging public awareness of social responsibility.

According to Nielsen Media Research, alcohol firms last year spent more than Bt2.6 billion on advertising, of which 65.3 per cent was poured into television commercials, 3.3 per cent into radio spots, 14.6 per cent into newspaper ads, 2.6 per cent into magazine ads, 9.6 per cent into cinema ads, 3.9 per cent into outdoor ads, 0.4 per cent into ads on mass-transit systems, and 0.3 per cent into retail displays.

He said that Thai Beverage had spent more than Bt300 million a year on media advertising including television and radio spots to promote its Chang beer. The Public Health Ministry’s plan to ban alcoholic advertising would likely not have a serious impact on established alcohol firms, but new players just entering the market would definitely feel the effects.

“We have to admit that the controls would be really effective,” said Piti Bhirombhakdi, advertising manager of Boonrawd Trading Co Ltd, the marketing arm of Boonrawd Brewery, brewer of Singha Beer.

Piti said the situation would drive brewers into a price war. He said that newcomers in particular would apply pricing strategies in their drive to become recognised and registered. That’s because pricing is the only one of the four “Ps” (product, price, promotion, place) the government has yet to control.

“The government aims mainly to restrict advertising and sales times, but not consumption,” Piti said. “Once we all get into a price war to maintain sales, consumption could grow.”

Piti said that recent government measures have resulted in zero growth of the Bt82-billion beer market. He added that the government should concern itself with controlling the drinking habits of consumers before issuing regulations banning alcohol advertising and marketing campaigns.

Wimonwan Udomphorn, vice president of Riche Monde (Bangkok) Co Ltd, a distributor of well-known imported Scotch whiskies, including Johnnie Walker, Benmore, and Spey Royal, said that any regulations and controls should be strictly enforced.

“The government should hold discussions with businesses and invite them for consultation and advice in order to solve the problem together in a more effective way,” said Wimonwan. She said that Riche Monde regulates itself by avoiding non-responsible advertising and campaigns such as tie-ins on children’s television programmes, the use of ad presenters under the age of 25, and sexually arousing ads.

Chaipranin Visudhipol, president of the Advertising Association of Thailand and chairman of TBWA\Thailand, said that the ban would have a detrimental effect on liquor companies. They would face difficulties selling brands internationally due to a lack of domestic marketing support.

He said that the ban would lead to a “perception monopoly” of a few famous brands, while newcomers would be unable to carve out market share. It would contradict the concept of free trade.

“The advertising sector would be seriously affected, losing between Bt1.8 billion and Bt1.9 billion of the advertising money spent by alcohol companies every year,” said Chaipranin.

Kwanchai Rungfapaisarn

The Nation

Post your comment to this story here