Time to face reality: Thailand has a drink problem
August 21, 2014 01:00 By David Swartzentruber
Governments have repeatedly ignored the epidemic of alcohol-related deaths; the NCPO should chalk up tax reform and liquor licensing on its reform agenda
Every year the horrific toll of deaths and injuries on Thai roads peaks with the bloody week of Songkran. And every year education and the enforcement of laws against drunk driving are highlighted as the main weapons in curbing alcohol consumption.
However, educating students to the risks of drinking would have to be part of a citizenship module that is not currently offered in Thai schools. Thus, it is a long-term goal. Enforcement of drunk driving laws needs to occur after the implementation of more stringent laws as well as an improvement in the actual performance of policing in this vital sector. Once again, this is likely a long-term objective.
In contrast, two sectors of the alcohol trade can be easily and quickly changed to provide a more concrete framework to control the unchecked flow of alcohol into Thailand’s citizens. They are excise tax reform and greater control of retail outlets.
It only took a stroll through my closest shopping centre to see how taxation affects the cost of alcoholic beverages in Thailand. At Big C in On Nut, the price of Thailand’s top-selling whiskey, Hong Thong (35 per cent alcohol), is a mere Bt239 for a 70cl bottle. Next to it was Song Sam, 40 per cent alcohol at Bt271. On the next shelf down, 70cl of Rongkaw white spirits (“lao khao”), 40 per cent alcohol, was priced at Bt99.
Looking across the aisle, I spied three solitary bottles of wine produced in Thailand. I chose one for reference, Siam White Blend 2012 vintage, produced by Siam Winery, 750ml bottle, 12.5 per cent alcohol, costing Bt299.
Is there any wonder that if you approach Thais, they will always say that “wine is expensive” – it is the government excise tax policy that makes wine more expensive than domestically produced whiskey. Thai beer remains the lowest priced alcohol product by volume on the market due to its lower 5 per cent alcohol content.
Does Thai excise tax policy meet international standards? No, it does not, as the tax is filtered through the use of the “wholesale price” to circumvent the international standard of taxing alcohol by the volume of the alcohol content (ABV). Thai-produced whiskey is cheaper because it is calculated on the lower value of the baht in the wholesale price, compared to the US dollar, the euro or other currencies from developed countries.
What are the results of this excise tax policy? Of the total Thai alcohol consumption in 2013, whiskey accounted for 73 per cent, beer 27 per cent and wine under 1 per cent.
A 2013 study by the Thai Centre for Alcohol Studies reported Thais 15 years old and older consume an average 7.1 litres of pure alcohol per year. The consumption of high-alcohol whiskey may account for four of the five leading causes of death in Thailand: stroke, diabetes type II, cardiovascular diseases and highway deaths. Worldwide, the amount of alcohol consumed per capita was 6.13 litres in a report issued by the World Health Organisation in 2011. That puts Thailand as the sixth-largest consumer of spirits in the world.
Compare this to a Western country such as the United States.
Although the tax on alcohol is administered by each of the 50 US states, the general rule is AVB – the higher the alcohol, the higher the tax. Those old cowboy movies were accurate – the US was once a whiskey-drinking country – but in the 1970s, things began to change.
The consumption chart for the United States shows that now, 12 per cent of all alcohol consumption is whiskey, 48 per cent is beer and 40 per cent wine. Wine is the preferred beverage for the home, as women reportedly prefer it to high-proof liquor and the “bar room” aura of beer.
In the United States, the number of retail outlets is usually tightly controlled according to population density and proximity to churches and schools. Often, a public hearing is held for citizens to voice their approval or disapproval of an alcohol outlet in their community. A board of elected officials then decides on the fate of the licence. But even then, that decision can be challenged in the court system.
During the past 10 years, the number of retail shops selling alcohol in Thailand has increased by 120,000. There are now more than 600, 000 shops selling alcohol, according to the Centre for Alcohol Studies.
Look only at this year’s Songkran death and injury totals and its is blatantly apparent that Thai government policies are ineffective. Worse, there does not appear to have been any sincere desire of any Thai government, regardless of party affiliation, to take effective action.
Does Thailand want alcohol reform?
Chances of change to the stranglehold that domestic spirits producers enjoy on the excise tax appear dim.
Reforming the entire alcohol sector would require a change in the excise tax, more stringent laws for the awarding of retail liquor licences, education in public schools and new, more stringent laws for drunk driving.
If reform ever gets off the ground it must address these issues.
David Swartzentruber worked as a clinical psychologist in the United States for 15 years and treated many patients with alcohol abuse issues.