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Published on November 9, 2007

Also, economy beers will become a new battlefield in the fight for a share of the lower-income segment, particularly in the Northeast, where people are more concerned about price than mass-market advertising.

Singha will officially launch its latest Isaan beer to challenge Thai Beverage's Archa, which has gained dramatic growth in the Northeast. The company will conduct a press conference to announce the launch of its Isaan beer today. Somchai Suthikulpanich, senior vice president of Thai Beverage Marketing, distributor of Chang beer, said 2008 would be a tougher year for the local beer market, due to several negative global factors.

"I myself cannot predict anything about the beer market's situation this year, because any growth will depend on the sales situation in the fourth quarter, which is the peak season," said Somchai, adding that next year would be much tougher for local players. "The 2.1-billion litre beer market in Thailand has not been good so far this year. The market is quiet and gloomy," he said.

 

 

 

Somchai said that 10 years ago, the local beer market enjoyed annual growth of 20-30 per cent, but it posted only 5-6 per cent growth last year, because the market has become more mature.

He said he was pessimistic about next year, because continuous increases in oil prices had driven up transportation costs, plus raw materials for malt and glass bottles were also becoming more expensive.

"We've seen a big impact in many big financial companies, including the removal of Merrill Lynch's CEO and the resignation of Citigroup's chairman. The US government has recently injected a lot of money to maintain its economic system following the collapse of the real-estate sector," said Somchai, adding that the lower spending power of US consumers would affect exporting countries like China and Thailand.

He said the government's policy of banning advertising of all alcoholic beverages would affect local brewers, who were forbidden to create any advertising and promotional campaigns to attract drinkers.

Singha will launch its new Isaan beer this weekend as a direct challenge to Archa beer, the economy beer launched two years ago by Thai Beverage. Isaan beer will capture potential customers in the Northeast, the Kingdom's largest region for beer consumption.

Brewed by Singha's plant in Khon Kaen, the new Isaan beer is in line with Singha's strategy of offering an alternative beer at a more competitive retail price than that of Archa. The brewery's Khon Kaen location has the advantage of cheaper transportation costs and flexibility in delivering the product and reacting to the market.

"Consumers in the area will be able to compare our product quality with our rival's Archa beer, then make their final decision," said Somchai, adding that Thai consumers liked to try new products but that after the trial, it was a different issue whether they staid with it or not.

"We don't have a strategy right now for introducing such a new beer to penetrate a particular area of distribution," Somchai said. "Anyway, we don't want to limit ourselves to such a strategy."

Kwanchai Rungfapaisarn

 The Nation