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Deputy Finance Minister Pruttichai Damrongrat said due to the higher excise tax, cigarette prices could rise by Bt3 per pack, while liquor and beer prices would be raised by Bt2-Bt3 per bottle. The increase of the sin tax would take effect immediately after the Cabinet approval.

According to Pruttichai, the sin tax increase would generate around Bt12 billion in additional income over the next 12 months.

Northern liquor and beer distributors foresaw the continued slide in product demand following the Cabinet's approval to the excise tax increases. Thaweewat Ratiromphan, managing director of Chiang Mai CD Supply Co Ltd, said that while the higher excise taxes would pressure demand for expensive liquors, cheap liquors would enjoy higher demand. He noted that distributors who have stocked up large inventory and do not raise the retail prices would have the advantage over the others.

He noted that since the economy collapses, liquor and beer sales have dropped over 30-40 per cent on year. He added that the impact of the higher excise taxes would depend on the increases in retail prices.