Tax 'does not deter drinkers'

Taxation is proving incapable of halting the rise in alcohol consumption and is harming certain brands while giving a shot in the arm to other products and illicit smugglers, a study suggests.
The country has raised the tax on alcohol on several occasions but the nation's passion for a tipple has remained consistent, said research consultant Nipon Poapoungskorn, of the Thailand Development Research Institute (TDRI). However, the imposition of higher rates of alcohol tax has caused poor behaviour among drinkers, who are often tempted to pick a cheaper form of the demon liquor, said Nipon. Drinkers were more inclined to drink larger amounts of booze if they were opting for a cheaper beverage, the researcher said. "People often opt to buy a couple of medium-priced drinks rather than one expensive choice," he said. TDRI recently conducted a research and development project on measures to counter problems associated with excessive alcoholic consumption and the results of the study were presented to the Thai Health Promotion Foundation as well as the National Health Foundation. The study suggested that high taxes encouraged the smuggling of alcohol, which in turn reduced earnings from taxes, said Nipon. Imported alcohol can sometimes take the form of rough moonshine, which has been known to cause serious health problems and even blindness. "Consumers want a cheaper drink and if that can only be found on the black market, then that will reduce tax revenues" he said. The researcher revealed that smuggling accounted for about 10 per cent of whisky imports and as much as 55 per cent of imported wines. Nipon said the current alcohol tax had also created an inequity between premium, medium and economy grades of beverage in terms of their ability to compete in the drink market. The current taxation was less favourable to the medium-priced drinks compared to the expensive and cheap beverages, which had seen an increase in sales since the recent tax rises, he said.
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