Business
Beer Loving Politician Takes on Thailand’s US$14 Billion Beer Duopoly
A beer loving politician who was arrested for illegal brewing in Thailand is hoping that his party’s election victory would give him a long-awaited chance to break up a US$14 billion beer duopoly held by two of the country’s wealthiest families.
Taopiphop Limjittrakorn, a brewer-turned-politician, has been campaigning for years to change severe restrictions, taking on Boon Rawd Brewery and ThaiBev, which have long maintained a stronghold on alcohol manufacturing.
He is a member of the progressive Move Forward party, which won the most seats in the May 14 general election and is vying to form the next government. It signed a deal with potential coalition partners on Monday, which includes measures to “abolish monopolies and promote fair competition in all industries, including alcoholic beverages.”
Despite being the single-largest party, the probability of a Move Forward-led government remains questionable due to a constitutional provision that favours military-linked parties.
“The progressive alcohol bill is more than just a bill; it’s a political project,” Taopiphop, 34, who was re-elected in a Bangkok district, said in an interview at his pub.
“Right now, I’m gathering all of the stakeholders in this policy to make it go as smoothly as possible because I recognise that we are no longer the opposition.” “We are the government.”
Boon Rawd, the maker of Singha and Leo beers, and ThaiBev, the maker of Chang beer, did not immediately react to Reuters’ questions.
The Bhirombhakdi family, Thailand’s 15th richest according to Forbes, owns and controls Boon Rawd, the country’s first brewery created in 1933. Charoen Sirivadhanabhakdi, Thailand’s third-richest person with a net worth of $14 billion, established ThaiBev.
If Move Forward is able to lead the government in opening up the alcohol sector, the two companies’ performance may suffer in the short term due to new competition, according to Damien Yeo, Consumer and Retail Analyst at research firm BMI.
“Over the long run, both ThaiBev and Boon Rawd have plenty going for them that will help them maintain a healthy lead over any potential new competitors,” Yeo said, citing both companies’ improved market and regulatory knowledge.
Beer accounts for more than half of Thailand’s alcoholic beverage market, which is expected to be worth 473 billion baht ($13.97 billion) in 2020. According to a February 2022 analysis by Krungsri Research, Boon Rawd owns 57.9% of the beer market, followed by Singapore-listed ThaiBev at 34.3% and Thai Asia Pacific Brewery at 4.7%.
According to Krungsri Research, ThaiBev is also the undisputed leader in the spirits market, with a 59.5% share, while the second-place company has only 8%.
Taopiphop stated that by amending the excise regulations, which had previously failed to pass through parliament, he hoped to lower high entry hurdles for the alcohol business, which mostly benefit huge firms such as Boon Rawd and ThaiBev.
Taopiphop stated that the goal is to assist small domestic craft beer brewers in gaining at least 10% of the beer industry within a decade.
Piti Bhirombhakdi, who serves on the board of Boon Rawd, stated his support for industry reform in a social media post on May 19 following Move Forward’s election victory.
“There will be some impact, but competition exists in free trade.” “We’ll have to change our plans,” he replied in response to a Facebook comment.
A ThaiBev official remarked on a May 12 earnings call, ahead of the election, that the company was on the lookout for new laws. The stock of the corporation is trading at its lowest level since early November.
“We’ve been keeping a close eye on each party and their policies,” said Senior Executive Vice President Ueychai Tantha-Obhas. “We just prepare for any outcome.”
Taopiphop, a lawyer who became a tour guide before turning to brewing, said he hoped to follow up on regulatory relief with additional laws on rationalizing restricting alcohol advertising and permitting 24-hour alcohol sales.
