New excise tax to trigger price adjustments for ThaiBev

Tax on some of its spirits could rise by $1.2.

Thailand’s new excise tax law could pull up the prices of ThaiBev's products.

According to OCBC Investment Research, officials expect ‘moderate’ rises in prices for products such as alcoholic beverages.

The new law is based on the retail price, instead of ex-factory prices previously.

The tax for ThaiBev's beer will rise by 2 cents (THB0.50) per can and 11 cents (THB2.66) per bottle.

White spirits will be taxed more by 3 to 14 cents (THB0.84-3.49) per bottle.

For other types of locally produced spirits, the additional tax will be 32 cents (THB8) per bottle for 28% alcohol content and $1.2 (THB30) for 40% alcohol content.

Sugary drinks also face higher taxes. Soft drinks will be 1 to 2 cents (THB0.13-0.50) per bottle, whilst sugar-free soft drinks will be taxed less by at least 1 cent (THB0.28-0.36) per bottle.

Here's more from OCBC:

While it is not yet clear as to the extent of price adjustments that might be made given the change, there could be some pre-stocking up of goods by traders.

We keep in mind that the current 3Q (4QFY17) is seasonally the softest consumption period for the group.

Despite short-term effects, looking towards FY18, we believe A&P efforts will be more effective and on-premise consumption may recover following the end of the mourning period in mid-Oct.

Visit Singapore Business Review website for other stories.

Your rating: MagBe