Thai Wine Tax Cut Backfires: Consumption Soars, State Loses Millions

New research reveals tax exemption on imported wine has fuelled a surge in drinking and social costs, while costing the government nearly 600 million baht annually

A controversial tax exemption on imported wine in Thailand has led to a significant increase in consumption, particularly among high-income earners, while costing the government millions in lost revenue and imposing substantial social burdens.


A study conducted by Assis Prof Dr Mana Laksamee-arunothai and Assoc Prof Dr Chidtawan Chanakul from Kasetsart University's Faculty of Economics reveals that the policy, implemented in early 2024, reduced customs duties from 54%-60% and lowered excise tax.


This has resulted in an estimated annual revenue loss to the state of almost 600 million baht.


The research found a dramatic 300% increase in consumption of wines priced between 3,001 baht and 5,000 baht within a single year.


Overall, the value of wine imports jumped by over 10% compared to the previous year, with direct benefits primarily accruing to foreign wine producers. While cheaper wines (under 1,000 baht) saw negligible price drops, high-end wines became over 10% cheaper, boosting demand among affluent consumers.

However, the policy's social and economic costs are substantial. The study estimates the total cost stemming from increased wine consumption, including risks from accidents, domestic violence, and impacts on children and youth, at over 10.3 billion baht.


Senator Lae Dilokvidhyarat, speaking at a recent public forum, criticised the government's decision to exempt taxes on luxury goods like wine.


He argued that it contradicts basic economic principles, leading to both lost revenue and negative public health and social consequences.

Thai Wine Tax Cut Backfires: Consumption Soars, State Loses Millions

Strange that, most of the wine drinkers I know complain that the cut has not been passed on.

I certainly haven't seen prices fall.

More like a roughly 40% increase since pre-COVID times.

Admittedly though, I'm not looking at wines between 3-5 thousand baht. :D

A 300% increase in those sales might not add up to many bottles.

And this looks like it was taken from that popular resource, madeuponthespot.com

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However, the policy's social and economic costs are substantial. The study estimates the total cost stemming from increased wine consumption, including risks from accidents, domestic violence, and impacts on children and youth, at over 10.3 billion baht.

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Let me jump in and say I have not seen any decrease in wine prices. A lot more wine, yes, but less expensive, no.

If there were low taxes on good wines in Thailand, then they wouldn’t be 3x the price they are in Tachileck.

I don't really see people drinking 5,000 baht bottles of wine then smacking the shiz outta their Julie in front of their kids.

In terms of negative effects on youth, perhaps they mean that teenagers are now buying and drinking 5,000 baht bottles of wine where they didn't before due to a higher tax bracket?

I've drunk/bought wine once in perhaps the last 4 years and was noticeably surprised by how cheap it was.

Around 2 months ago with Teeny, as she had never drank it and wanted to try. I mentioned on here how cheap I thought it was.

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Originally Posted by Edmond

Someone's getting a bit cleverer at branding their fruit wines like the real thing.

Stopped off in a small Lotus's's last night, and TNY mentioned that she's never tasted wine before. She is under the legal age to drink, so I suppose it shouldn't have been too surprising.

Their selection was rather small, but the prices were quite surprising.

https://i.imgur.com/j1LRpsO.jpg


I haven't drank or bought wine in 3 - 4 years, but don't recall btls of Wolf Blass only being 3xx baht each.


https://i.imgur.com/aVd9jAI.jpg


Perhaps a mistake?

They had all been pillaged anyway, so I was left with this:


https://i.imgur.com/r5JjdG2.jpg



13% which ticked the MalmoMike box deep within.



A quick scan saw the Cab-Sav and South Australian words without much attention paid to the rest.

https://i.imgur.com/9g6sQGw.jpg

Was that for 345 baht, which I thought was pretty cheap, possibly priced incorrectly cheap, or a 1.5 mendo bag of Montclair or Laughing Bird btl.


Wasn't bad, wasn't good. Certainly in no rush to buy it again. TNY mixed hers with water, thankfully not soda water.



Without any knowledge on the subject, I would guess that they import either the Aussie grapes then turn it into wine here with extra fruit juice added and don't have to pay a vat full of tax, or import it in barrels of an unsellable form, mix the fruit juice in here, the btl and sell and get away with low taxing.

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Same old mediocre wines at silly prices where I am in NE Thailand. I still buy a box but it hasn't got any cheaper.

The QS World University Rankings 2021 ranked Kasetsart University 149th in Asia and 801-1000th in the world. (Wiki.)
After this piece of nonsense they deserve to slip further down. Plainly designed purely to give something that Senator Lae can whine (ahem) about.
Wine taxes and tariffs and duties all add up in funny ways. A couple of things to consider:

If retail sales of wine went up from about Baht20B to about Baht22B, then the VAT alone would add Baht200M to government revenues. (I know VAT is reduced 'temporarily' to 7%, let's assume it goes back up this year.)
Those increased sales contribute at least an extra Baht2B to GDP growth. Every little helps.
About 75% of Thailand's wine imports come from countries which have Free Trade Agreements with Thailand: Australia, NZ and most recently the EU. Slapping new tariffs on those imports could be problematic.
Most quality wine is sold in international hotels and restaurants. This probably has met an initial target of increased tourist spending.
If I were quaffing wine at B5K per bottle, I'm hardly likely to go on a drunken spree when it drops to B4.5K. (Actually, I might. I mean normal people.)

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Originally Posted by cyrille

And this looks like it was taken from that popular resource, madeuponthespot.com

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Dream of a number, multiply it by 10 and call it research.

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Originally Posted by Troy

Same old mediocre wines at silly prices where I am in NE Thailand. I still buy a box but it hasn't got any cheaper.

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Originally Posted by misskit

Let me jump in and say I have not seen any decrease in wine prices. A lot more wine, yes, but less expensive, no.

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I know I have said this before. The same old mediocre wines are still at the same silly prices. CP Group are laughing at us. It is customer inertia. Mendip is still buying Mont Clair.

There are wines not seen 2 years ago that are definitely cheaper than those familiar old faces. Look at that Laughing Bird that Eddie pictured at B585 for 1.5L. Yes it is marginally more expensive than Mont Clair but the Laughing Bird is actually grape wine and I don't recall seeing anything drinkable below B300 per bottle a couple of years back.

Attachment 125011

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Originally Posted by Shutree

Mendip is still buying Mont Clair.

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Korat Chef sell 3 litre boxes of Mont Clair for 600 Baht. They are nearly 1000 Baht every where else... Makro, Lotus, etc.

That's a pretty good deal. In Australia we produce a lot of good wine and a lot of ordinary wine but I'm not much of a wine drinker,mates that are swear that Oz wine is top notch and cheap. Even in Laos mates from Thailand would always return to Thailand with as much wine as possible. Wine is super cheap in Lao..maybe the Lao got a taste for it from the French?

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Originally Posted by Edmond

I haven't drank or bought wine in 3 - 4 years, but don't recall btls of Wolf Blass only being 3xx baht each.

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Originally Posted by malmomike77

Attachment 125011

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That was my take on it.

I certainly don't recall WB only being 3xx thb when I was a regular wine drinker 5 or so years ago.

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Originally Posted by Mendip

Korat Chef sell 3 litre boxes of Mont Clair for 600 Baht. They are nearly 1000 Baht every where else... Makro, Lotus, etc.

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Respect. That's cheap! B150 per bottle. Is it all within the BBF date?
My local mom n pop shop has some Heineken in the chiller wearing the special labels they did for Euro 2020.

^ you can't beat a drop of can aged Heineken.

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Originally Posted by harrybarracuda

Strange that, most of the wine drinkers I know complain that the cut has not been passed on.

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Oh sure....
:rolleyes:

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Originally Posted by HuangLao

Oh sure....
:rolleyes:

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Do you know any wine drinkers Jeff?

You would seem to be the sort of person who would scrabble around the Seattle Costco for discount beer.

Portland. Portland Costco. :)

3k to 5k baht bottles of wine? Come on. Maybe at some high end restaurants in BKK. Just buy a bottle of Woodford Reserve Rye for 2k baht and relax. Like BLD, I am not a wine drinker but I personally couldn't imagine drinking anything stored in a plastic liner in a box no matter how cheap. Maybe its an acquired taste? Do you guys add ice like most do with Leo?

I bet MK and Norton remember "2 buck chuck" from Trader Joe's. I heard it was really good.

Not worth drinking wine in Thailand.

I tend to agree.

But you know how it is with alcoholic drinks.

If you have a taste for wine then nothing else hits the spot, I guess.

True point Cyrille. I guess if you have been a wine drinker in the country you moved from, you learn to lower your standards and accept what you can get or pay more for better quality. Same goes for Beer. I will, without question, pay more for good beer, whiskey or bourbon then buy cheap stuff to save a few baht. Life is far to short for that.

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Originally Posted by cyrille

I tend to agree.

But you know how it is with alcoholic drinks.

If you have a taste for wine then nothing else hits the spot, I guess.

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Fair comment. I knew a Frenchman in Indonesia who refused to drink wine in South East Asia but drank it almost exclusively when in Europe. I tend to work on the premise that what you save on rent, taxis and other living costs more than makes up for what you have to spend more on like wine or decent cheese.

However, I enjoy those luxuries sparingly rather than smashing them like Costco yellow stickered food and gutrot brandy.

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Originally Posted by misskit

Portland. Portland Costco. :)

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Ah yes, that's the one.