Alcoholic Drinks in Thailand - 2024 Market Summary
Alcoholic drinks in 2023: The big picture
Alcoholic drinks saw volume sales rise in Thailand in 2023. Beer and imported spirits registered a dynamic year, while wine saw growth in the number of imports and cider/perry remained a niche segment. Tourism was a key influence on the development of the alcoholic drinks market in Thailand during the year. Thailand is a popular tourist destination known for its nightlife and entertainment venues and the recovery of the tourism industry following the pandemic had significant implications for the sale of alcoholic drinks, particularly in tourist-heavy areas such as Bangkok, Phuket, and Pattaya. The health and wellness trend was another influential factor in the development of alcoholic drinks in 2023, increasingly shaping players’ product innovation strategies and prompting the development of products with low or no alcohol content and fewer calories. The beer category continues to be dominated by a few players, but Carabao (CBG) has recently joined the competition.
2023 key trends
The inflationary environment towards the end of the review period, with producers facing rising production, packaging and transportation costs, led to increasing unit prices in alcoholic drinks categories, including beer, which saw prices rise by around 1-3%. Nonetheless, the Thai alcoholic drinks market saw a trend towards premiumisation, with Thailand's growing middle class and increasing incomes have contributed to the demand for premium products and services. In addition, the influence of global trends and the rise of social media have fuelled consumers' desire for aspirational lifestyles, further driving the appeal of premium brands. Meanwhile, the rise in consumer health consciousness was driving growing interest in low alcohol and non-alcoholic drinks and leading to an expanding offer of such products. Advertising campaigns highlighted that these products provide taste, variety, and social enjoyment without the negative health effects associated with high levels of alcohol consumption.
Competitive landscape
Thanks primarily to their strength in beer, the largest alcoholic drinks category in Thailand, the two brewers, Thai Beverage and Boon Rawd Brewery, retained the outright lead in alcoholic drinks in 2023. Thai Beverage, however, also remained the dominant player in spirits, particularly other spirits such as mixed spirits and sura khao. Siam Winery continued to lead wine and dominated RTDs in 2023, whilst it also held a strong volume share in cider/perry. However, the small size of these categories meant that it only held fifth place in overall alcoholic drinks in 2023, with Thai Asia Pacific Brewery holding fourth place overall due to its fourth place ranking in beer and its lead in the smallest category, cider/perry. Thai Asia Pacific Brewery and Siam Winery each dropped a place in the overall rankings during the year due to the entry of Tawandang German Brewery 1999 Co Ltd in beer with the Carabao brand, which gave it third place in the alcoholic drinks rankings overall. The player introduced two brands -Tawan Daeng and Carabao. Tawan Daeng offers three products - Weizen, IPA and Rose. Meanwhile, Carabao offers two products - a domestic eco lager and a stout.
Amongst the fierce competition in the alcoholic drinks market, wine displays relatively low levels of innovation in terms of new product developments and marketing activities. This is possibly due to the inconsistency of demand, as local consumers tend to drink beer or spirits.
Retailing developments
Offline channels, including both modern and traditional trade, remain key to the growth of sales in alcoholic drinks. Supermarkets offer premium wine stores to provide an enhanced shopping experience.
Companies focused more on sales through the off-trade during the period of the closure of foodservice and a ban on the on-trade sale of alcoholic drinks in the COVID-19 crisis. They adapted their marketing strategies to boost sales through the retail channel. For instance, major domestic company, Siam Winery, began selling three of its brands in flexible aluminium pouches (Mont Clair, Peter Vella and Mar Y Sol), while consumers could also find sura khao in multi-packs at grocery retailers throughout the country. Thus, the pandemic reinforced and developed players’ presence in off-trade channels.
The removal of restrictions and recovery of tourism provided a considerable boost to demand through foodservice channels. As such, consumers tended to migrate back from retail to foodservice outlets across all alcoholic drinks categories. Alcoholic drinks products that primarily target home consumption, like low-end spirits, have seen demand adversely affected since consumers have been turning back to their original consumption patterns.
On-trade vs off-trade split
The easing of COVID-19 related restrictions and a rebound in the tourism sector have increased demand for alcoholic drinks through foodservice channels. Customers have, therefore, frequently moved back from off-trade to on-trade consumption across all categories. Beer, imported alcoholic drinks, and wine are frequently found in all restaurants and are increasingly in demand amongst on-trade players. All modern trade channels that were forced to close and have limited operating times during the lockdown period are now fully open. Consumers who moved to nearby local grocery stores are gradually returning to those modern trade channels.
Foodservice matters and showed significant growth in 2023 as concerts, festivals and social gatherings resumed, and people hung out socially.
What next for alcoholic drinks?
The health and wellness trend will exert a growing influence on the development of the alcoholic drinks market in Thailand in the forecast period. With Thai consumers displaying a growing interest in healthier lifestyles, there is growing demand for low alcohol or non-alcoholic options, as well as drinks with natural ingredients and fewer additives amongst a niche consumer segment. The health and wellness trend is expected to act as a particularly significant constraint on growth in the spirits category. Despite the shift towards non-alcoholic drinks, however, the majority of consumers will continue to prefer alcoholic drinks.
Despite consumers’ concerns about their finances at the beginning of the forecast period, the move towards premiumisation is expected to continue. Although some consumers are expected to cut their consumption, they will opt for more premium, better-quality products when they do drink. Consumers are increasingly seeking high-quality and premium alcoholic beverages, and are willing to pay more for unique and artisanal products. The increasing interest in craft beer, small-batch spirits, and premium wines represents an example of this trend. Some categories, such as cider/perry, still have room for more variety and marketing.
MARKET BACKGROUND
Legislation
Legal purchasing age and legal drinking age
According to section 29 of the Alcoholic Beverage Control Act BE 2551, there is no difference between the legal drinking age and the legal purchasing age in Thailand. The law forbids the sale of alcohol to those under the age of 20. In addition, a person who is clearly drunk is not legally allowed to purchase any alcoholic drinks. Furthermore, it is also stated in section 40, regarding penalties, that any retailer selling alcoholic beverages in violation of section 29 is liable to imprisonment for a term not exceeding one year or to a fine not exceeding THB20,000, or both.
Even though Thai law prohibits the sale of alcoholic drinks to anyone under the age of 20, a significant number of teenagers actually start drinking at a younger age. The law tends to be broken by those who consume alcoholic drinks whilst socialising. A recent public survey revealed that Thai youngsters who are keen to try alcohol start to drink at around the age of 15, encouraged by their peers and sales through entertainment establishments, where controls are not as tight. However, the local authorities are collaborating with the police to target those pubs, bars and nightclubs which allow entry to those under 20.
Drink driving
Section 43 of the Land Traffic Act BE 2522 (1979) was adopted to regulate drink driving in Thailand. This law states that no person shall drive a vehicle whilst intoxicated by alcohol. This prohibits driving when legally intoxicated, or with a blood alcohol concentration of 50ml or above. Intoxication is viewed as damaging three vital elements for safe driving – judgment, muscular coordination and vision. The state imposes severe penalties on drink drivers who are involved in accidents, including stiff fines and imprisonment, with the sanctions meted out in line with the extent of the damage caused during the accident. Other measures to penalise drink driving include the suspension of driving licences. All police officers are authorised to examine drivers whom they suspect may be intoxicated. Any driver suspected of driving whilst intoxicated may be asked to take a test to determine their blood alcohol level. This may be a blood test, a breathalyser or a urine test, or a combination of these.
Thailand's legal Blood Alcohol Content (BAC) is 0.05% or 0.5 grammes per litre of blood for drivers who have had their licences for over five years, and 0.02% or 0.2 grammes for newer drivers who have possessed their licences for less than five years.
Advertising
Chapter 4 of the Alcoholic Beverage Control Act BE 2551 is the legislation that bans the advertising of alcohol. Section 32 of this law states that advertising by any brewery or alcoholic drinks manufacturer is permitted, but only on the condition that it does not conflict with specific guidelines which prohibit advertisers from creating misperceptions about alcohol consumption, encouraging and inviting the general public to purchase and consume more alcoholic beverages and/or have public figures as presenters in advertisements. Furthermore, advertisements are not allowed to display directly or indirectly the properties of alcoholic beverages.
Public relations for alcoholic drinks can be made by communicating information on their social responsibility practices without displaying illustrations of the products or packaging, and only the company’s logo can be portrayed in these advertisements. There is also a ban on giveaways, prizes and free gifts when promoting alcoholic drinks. Moreover, the media advertising of alcoholic drinks is not permitted between 05.00hrs and 22.00hrs.
According to a legislative amendment in early 2013, the amount of alcoholic drinks packaging or advertising copy covered by warning messages relevant to the associated harm and dangers of consuming alcohol must now be at least 30%, up from the previous 25%. Acceptable warning messages include: “Drinking alcohol can cause cancer”; “Alcohol can harm sexual performance”; “Consumption of alcohol may result in disability and death”; “Alcohol leads to quarrels and crime”; and “Alcohol can affect family relations and society”.
The Thai authorities are considering restricting the advertising of non/low alcohol beverages such as zero-alcohol beer, as the advertising for these brands tends to feature the logos of the relevant brewer and can cause confusion amongst consumers.
The application of the regulation to ban illegal beer and alcohol advertisement is becoming stricter. More and more alcohol billboard advertisers and restaurants are being prosecuted for displaying signs for alcoholic beverages which are against the law under the Alcoholic Beverage Control Act 2008. In this regard, bars and restaurants which display advertisements for alcoholic drinks in the form of large billboards, vinyl signs and light box signs in front of restaurants will be more carefully investigated.
In September 2020, the Alcoholic Beverage Control Act further amended the advertising registration, making it stricter, with changes taking effect from 7 December 2020. Furthermore, after the COVID-19 pandemic, such registration appeared to be more stringent and more heavily enforced resulting in fines for many bar owners, e-commerce retailers and importers. According to the Act, those who share a picture of alcoholic drinks through social media could be considered to have broken the law as well as those showing a picture of alcoholic drinks for advertising, making them subject to a fine of between THB50,000 and THB500,000 and/or a jail term of up to one year.
Smoking ban
The legal age for smoking in Thailand is 20 years. In Thailand, smoking is prohibited in almost all indoor public places, indoor workplaces and public transport facilities and vehicles. However, international airports may have designated smoking areas and hotels may permit smoking in guest rooms. Non-air-conditioned facilities serving food and/or drinks must be smoke-free only in the areas where these are served.
Smoking is prohibited in the following outdoor places: facilities for exercise, sports training grounds, sports pitches and at sports competitions of all kinds, in public parks, zoos and amusement parks, children’s playgrounds and markets.
Late 2017 saw Thailand ban smoking and littering with cigarette butts and packaging across 24 beaches in 15 provinces, including several major tourist destinations, such as Phuket, Koh Samui and Krabi. This move was taken in an effort to protect the country’s coastal environment. Designated smoking areas have been established in close proximity to these beaches. Those who fail to comply with the new rules may face a fine of up to THB100,000 and a maximum jail sentence of one year, or both. The ban is expected to be rolled out across more beaches over the forecast period.
Opening hours
The Liquor Act (1950) states the permitted selling times for alcoholic drinks. Specifically, the retail sale of alcoholic drinks in convenience stores, supermarkets and hypermarkets is permitted from 11.00-14.00hrs and from 17.00-24.00hrs. In addition, the law also lists the dates on which the sale of alcohol is prohibited, with these dominated by the five main Buddhist holidays – Makha Bucha, Visakha Bucha, Asalaha Bucha, Khao Phansa and Awk Phansa. These holidays are part of the lunar calendar and their dates vary from year to year. Despite the above-mentioned restrictions, some on-trade outlets are able to extend their opening hours until 02.00hrs, but only after receiving special dispensation.
According to section 27 of the Alcoholic Beverage Control Act BE 2551, the sale and consumption of alcoholic beverages in alcohol-free zones is illegal. Designated areas where alcohol cannot legally be consumed include educational establishments, religious institutions, temples, public health service units, hospitals, pharmacies, parapharmacies, public parks, government areas and petrol stations. In addition, in section 28 it is stated that no person shall sell alcoholic beverages on days when the relevant minister announces a ban on alcohol sales, such as Buddhist holy days and election days.
From December 2023, there was a new regulation covering opening times in selected zones in five provinces: Bangkok, Phuket, Chonburi (Pattaya), Chiangmai and Koh Samui. This saw opening times extended to 18.00-04.00hrs.
On-trade establishments
On 1 January 2016 a ban on the sale of alcoholic beverages within 300m of schools and temples was implemented. This ban applies to both on- and off-trade establishments, although wholesale facilities are exempt.
Within consumer foodservice, the two most important on-trade channels for alcoholic drinks are full-service restaurants and bars/pubs. It is uncommon for establishments in other consumer foodservice categories to be licensed to sell alcoholic drinks.
Not all full-service restaurants are able to sell alcohol, as a licence must be applied for and permission is not always granted, as numerous factors are taken into consideration. Moreover, even after being granted a licence to serve alcohol, restaurants still need to follow restrictions in terms of the time of day that they are permitted to sell alcoholic drinks.
Because of Thailand’s very favourable climate, on-trade outlets which sell alcoholic drinks usually focus on having outdoor seating. Notable examples include The Nest Bar at Le Fenix Bangkok Hotel, Attica Sky Lounge at Eastin Bangkok Hotel, Red Sky on the 55th floor of the Centara Grand Hotel, Ambar Pub & Restaurant at Four Points Hotel by Sheraton Bangkok and Sirocco at Lebua Hotel. These types of outdoor dining concepts attract consumers with their trendy ambience.
Beer gardens are also very popular amongst Thais, especially during the final month of the year, when the weather is cooler and consumers are generally in the mood to celebrate New Year. Some beer gardens offer two zones, with indoor and outdoor space, enabling customers to enjoy the good weather or alternatively an air-conditioned room. The best-known beer garden event is located at the front of the Central World shopping centre and takes place during November and December each year.
Premiumisation is being seen within on-trade establishments, with the rising popularity of wheat beer and craft beer, whilst tours of wineries are popular to promote and sell their products. Despite economic uncertainties, there remains a demand for premium and luxury alcoholic beverages and experiences. This includes high-end spirits, rare wines, and exclusive tasting events targeted at affluent consumers. Consumers are also increasingly interested in unique and artisanal cocktails made with high-quality spirits, fresh ingredients, and creative flavour combinations. Mixologists are experimenting with house-made syrups, bitters, and infusions to offer distinctive drinks.
Health conscious consumers are seeking alternatives to traditional high alcohol drinks. This has led to the rise of low alcohol and non-alcoholic options, such as mocktails, non-alcoholic spirits, and session beers, which cater to those looking for lighter drinking experiences.
Domestic brands such as Hong Thong, Blend 285, Maekhong, and Sangsom from Thai Beverage PCL have dominated mixed spirits for several decades. This situation can be attributed to these companies’ strong knowledge of local consumers, which has allowed them to continually launch new products for consumers to try. Moreover, over the years, these companies have established high levels of consumer trust and loyalty. However, consumer tastes are becoming more sophisticated, and many people are choosing to purchase premium products if they can get them at an affordable price. This has put increasing pressure on manufacturers to improve their existing products. Maekhong is worth mentioning since it was awarded a prize at the Tokyo Wine & Spirits Competition (TWSC) 2021 in Japan with its newly reformulated product, as it worked to build a more premium image.
OPERATING ENVIRONMENT
Contraband/parallel trade
The widespread distribution of contraband alcohol and parallel trade in alcoholic drinks remained a major issue for the industry in 2023, as the taxes levied on beer, local spirits and premium wine continued to encourage consumers to choose illicit products and/or engage with parallel trade in these categories. Contraband is also more widely available in rural areas
In general, the excise tax on alcoholic drinks remains high, and this is the main reason for the significant presence of contraband and parallel trade across the industry, as there remains an obvious and huge price gap between legal and illicit offerings. Sales through illicit channels thus continue to pose a threat to the overall performance of alcoholic drinks, particularly with regard to well-known brands of imported premium spirits and wine, such as Johnnie Walker in Scotch whisky and the Australian wine brand, Penfolds. Nonetheless, there are no figures from official sources with regard to contraband/parallel trade.
Sales of illicit alcoholic drinks normally occur in close proximity to the country’s porous land borders with Laos and Cambodia, including at Songhkla in the south and Chiang Mai and Chiang Rai in the north. Although alcoholic beverages are still popular through the contraband/parallel trade segment, new government policy has limited their expansion. The alcohol industry's stricter e-commerce regulations appear to be hurting overall sales for these channels.
Duty free
The Customs Department of Thailand is the body responsible for duty free sales of alcoholic drinks in the country. Even though duty free does not make a significant contribution to overall sales of alcoholic drinks, it is still considered an important channel amongst both local consumers and foreign visitors. Various types of products and certain exclusive items are available through this channel. A wide range of standard and premium alcoholic drinks are available through duty free stores at prices which are considerably lower than those in regular retail outlets. This makes duty free particularly attractive to consumers, especially those who are price sensitive. There are regulations placing limits on the purchase of alcoholic drinks through duty free stores in Thailand, and these are monitored and controlled by the Customs Department. Airline passengers are not allowed to purchase more than one litre of spirits or wine. However, whenever there is a chance to fly overseas or cross a border, consumers are likely to buy duty free alcoholic drinks.
The COVID-19 global health crisis significantly negatively impacted Thailand’s tourism industry, decimating the number of tourists able to visit the country. This subsequently had a dramatically negative impact on duty free sales. However, the demand for alcoholic drinks in duty free stores started to recover in 2022, driven by the country’s reopening scheme, which allowed inbound tourists to enter Thailand in May 2022.
Spirits products are more commonly purchased at duty free than beer.
Cross-border/private imports
Cross-border sales and private imports of alcoholic drinks are commonplace in Thailand, as the country has extensive and porous borders with several countries in which alcoholic drinks are cheaper. The Customs Department is the official body responsible for monitoring these imports. Cross-border/private imports remain a niche, however, having a limited impact on the overall performance of alcoholic drinks. Trade sources have estimated that the total volume of private imports is limited to no more than one litre of alcoholic drinks per capita per annum.
Although cross-border imports increased towards the end of the review period, the main factor which is driving growth is e-commerce from independent websites, which widely distribute products and ensure high consumer satisfaction due to lower price points.
During the COVID-19 pandemic, cross-border sales were boosted by several factors including the existing taxation policy and the alcohol ban imposed by the government to curb the COVID-19 pandemic. These unprecedented circumstances encouraged consumers to buy alcohol via cross border sales in order to avail themselves of lower price points. However, existing taxation policy in Thailand has also provided a boost to cross-border trade.
KEY NEW PRODUCT LAUNCHES
Non-alcoholic drinks was a notable focus of innovation at the end of the review peri, which saw the launch of products such as Ottinger 0%, Heineken 0.0 Malt, Hopster HOP SODA and Hite Zero 0.00 Malt.
Meanwhile, players looked to target the growing consumer demand for novel flavours in categories such as shochu/soju, which saw the launch of SEONMUL Strawberry & Mixed Berry and SEONMUL, Grape and Grapefruit. The end of the review period also saw the launch of the wine-based RTDs product, Spy Muscat Flower Sparkle with 7% ABV, and Zeltzer Fizz Red Apple an alcoholic sparkling water that is low in sugar and contains fewer than 100 calories.
Outlook
Premiumisation and targeting the younger generation of consumers of legal drinking age are expected to be key emphases of product innovation strategies throughout the forecast period. In addition, the strategy of focusing on the health and wellness trend is also worth mentioning, as more companies are looking to adapt to the rise in consumer health consciousness by reformulating the alcohol content of products or their ingredients. It is possible that the application of new alcohol taxation to non-alcoholic beer, may dampen demand in this segment and deter companies from investing in new product developments. However, the health and wellness trend is well established and extremely influential and is, therefore, likely to remain a notable influence on product innovation, including the launch of low calorie and low carb products, as well as non/low alcohol ones. Meanwhile, novel flavours are likely to play a key role in attracting younger consumers of legal drinking age.