A beer-loving lawmaker in Thailand once arrested for illegal brewing is hoping his party’s election win could give him a long-awaited shot at breaking up a US$14 billion alcohol duopoly of two of the nation’s wealthiest families.
Brewer-turned-politician Taopiphop Limjittrakorn has been fighting to overhaul strict regulations for years, taking on Boon Rawd Brewery and ThaiBev, which have long had a stranglehold on the production of alcohol.
He is a member of the progressive Move Forward party, which is pushing to form the next government after winning the most seats in the May 14 general election.
Photo: Reuters
The party on Monday reached an agreement with prospective coalition partners that include measures to “abolish monopolies and promote fair competition in all industries, such as alcoholic beverages.”
Although the single-largest party, the prospect of a Move Forward-led government is still uncertain due to a built-in constitutional provision that favors military-linked parties.
“The progressive alcohol bill is not only a bill, it is a political project,” said Taopiphop, 34, who was re-elected in a Bangkok district.
“Now, I’m gathering all the stakeholders in this policy to make it happen as smoothly as I can because I realize that we are not the opposition any more. We are government,” he said at an interview in his bar.
Boon Rawd, which makes Singha and Leo beers, and ThaiBev, the brewer of Chang beer, did not immediately respond to questions.
Boon Rawd, Thailand’s first brewery founded in 1933, is privately owned and controlled by the Bhirombhakdi family, the nation’s 15th richest, according to Forbes.
ThaiBev was founded by Charoen Sirivadhanabhakdi, who is ranked by Forbes as Thailand’s third-richest person with a net worth of US$14 billion.
If Move Forward is able to lead the government and open up the alcohol sector, the two companies might see short-term effects on their performance because of new competitors, BMI consumer and retail analyst Damien Yeo said.
“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, pointing to the firms’ better understanding of the market and regulatory issues.
More than half of Thailand’s alcoholic drinks market, valued at about 473 billion baht (US$13.68 billion) in 2020, is beer.
Boon Rawd controls a 57.9 percent share of the beer market followed by Singapore-listed ThaiBev at 34.3 percent and Thai Asia Pacific Brewery at 4.7 percent, a report released in February last year by Krungsri Research showed.
ThaiBev is also the runaway leader in the spirits market with a 59.5 percent share, with the second-place player holding only 8 percent, Krungsri Research said.
Through an amendment to the excise laws, which failed to make it through parliament previously, Taopiphop said he was aiming to remove high-entry barriers for the alcohol industry that largely favor big firms.
The aim would be help small domestic brewers gain at least 10 percent of the beer market within a decade, Taopiphop said.
In a social media post on Friday last week after Move Forward’s election win, Piti Bhirombhakdi, who is on the board of Boon Rawd, said he backed the liberalization of the industry.
“There will be some impact, but in free trade we have competition. We will have to adjust our plan,” he wrote in reply to a comment on Facebook.
On a May 12 earnings call, a ThaiBev executive said the firm was alert for new regulations.
“We’ve been watching this closely for each party, and what is their policy,” senior executive vice president Ueychai Tantha-Obhas said. “We just prepare for any outcome.”
A lawyer who became a tour guide before turning to brewing, Taopiphop said he planned to follow up on regulatory easing with further legislation on rationalizing restrictive alcohol advertising and allowing 24-hour alcohol sales.
“I’m not an extremist,” Taopiphop said. “I want to drink good beer.”
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