ThaiBev to enforce 5% price hike on spirits

That is if Thailand's Excise Tax Department raises ceiling rates for beer and wine.

According to Maybank Kim Eng, on 20 Aug, the Excise Tax Department raised the excise tax rate for blended and white spirits (along with cigarettes) by Bt5-7 per bottle for the white spirits, Bt8-12 per bottle for blended spirits and Bt3-12 per bottle for the brandy. The Excise Tax Dept Director General, Benja Louicharoen, revealed that the Dept is considering to raise the ceiling rates for beer and wine to give it flexibility to increase taxes in the future.

Here's more from Maybank Kim Eng:

Beer/Wine excise tax rates have maxed: Presently beer and wine are taxed at 55/60% of the ex-factory price or Bt100 per liter of alcohol content, whichever is higher. This has been already reached so tax adjustments would not be possible unless the rate is raised and that would require Cabinet approval. For THBEV, the excise tax on beer accounts for 57.9% of the unit price.

Hike in excise taxes in spirits has been anticipated: Before the excise tax hike, tax accounts for about 48% of THBEV’s unit price of spirits, on average. The tax hike could increase the selling price by Bt7.3/unit equivalent to nearly 5%. THBEV has anticipated tax hike, and have increase price of the browns in Mar-12 and whites in Jul-12.

The inventory stocking ahead of the price increase was the reason why the spirits division saw 11%Y/Y vol growth in 1Q12 and 9%Y/Y growth in 2Q12. During Oct11-Jun12, Excise Department generated Bt274bn revenue from excise taxes. Petroleum/Fuel remains the highest contributor (29.5%) followed by vehicles (23%). Beer taxes accounted for 15% and liquor for 12%.

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