Thailand: Recent easing of restrictions on small breweries still seen as protection for dominant players

Thailand's recent easing of restrictions on small breweries could crack open a beer market that is essentially a duopoly, but some argue the government still aims to protect the dominant players by opting for less-ambitious measures, the Nikkei Asia reported on December12.

Beer aficionados met at a park outside Bangkok late last month to celebrate the occasion, with small-scale brewing equipment brought in for the event.

"I want to try making something bitter and aromatic," one red-faced attendee said.

Previously, getting a brewery license required at least 10 million baht ($286,000) in capital and annual production of 100,000 to 1 million litres - in other words, a minimum equivalent to nearly 300,000 cans. Both of these hurdles were scrapped with amendments to Finance Ministry regulations implemented Nov. 2.

The looser regulations will make it easier for newcomers to enter the market, encouraging more diversity, said Wichit Saiklao, founder of Chit Beer, a popular brewery. More than 90% of Thailand's beer market is controlled by Boon Rawd Brewery and Thai Beverage, makers of the Singha and Chang brands, respectively.

But craft brewers remain blocked from retail markets, allowed to serve their beers only on the brewery premises. According to Wichit, last month's event technically violated the law.

The next battle will be over further liberalization, including in sales, Wichit said.

A bill submitted by the opposition Move Forward Party would have eased that restriction as well. But the pro-military ruling coalition voted it down by a slim margin.

The Move Forward proposal went too far in deregulating the industry, a government spokesperson said, citing the need to protect consumer health and prevent drunken-driving accidents.

Taopiphop Limjittrakorn, a lower house lawmaker from Move Forward who sponsored the bill and was once arrested for brewing his own craft beer at home, argues that the government's decision to enact its own regulatory changes was intended to benefit the conglomerates.

Critics allege that Thailand long has had issues with vested interests in the military, politics and big business protecting each other while maintaining a grip on wealth and power.

Taopiphop said that with lower house elections coming up next year, the government wants to prevent Move Forward from winning more public support.

Conglomerates dominate a number of markets in Thailand beyond beer. Though they help to support the economy, they also make it challenging for new players to get a foot in the door. The battle over breweries could be a barometer for other fields.

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