Politics of alcohol taxation system in Thailand: behaviours of three major alcohol companies from 1992 to 2012

Abstract

Sornpaisarn, B., & Kaewmungkun, C. (2014). Politics of alcohol taxation system in Thailand: behaviours of three major alcohol companies from 1992 to 2012. The International Journal Of Alcohol And Drug Research, 3(3), 210 – 218. doi:http://dx.doi.org/10.7895/ijadr.v3i3.155Aim: This study aims to describe the political strategies influencing alcohol taxation in Thailand from 1992 to 2012.Design: This study employs a case study research design, using a mix of qualitative and quantitative data analysis.Setting: Thailand.Findings: Three major companies comprise 92% of the Thai alcohol market, making it an oligopoly market. Ten increases of the alcohol tax rate occurred in Thailand from1992 to 2012, and the Thai government employed differential tax rate policies that favored four of eight beverage categories. These four beverage categories were produced mainly by one of the above-noted companies. Two significant events suggest that the other two companies tried to influence the Thai Prime Minister in 2005 and the Thai Parliament in 2007 to change the alcohol taxation method in order to favor the positioning of their products. As well, evidence revealed that alcohol companies had over-produced their products before three of the eight alcohol taxation increases from 1997 to 2009.Conclusions: Both domestic and international large alcohol companies in Thailand have exerted significant political influence on the Thai alcohol taxation system. This influence is exemplified by the Thai government’s differential alcohol tax rate policy, which favors their products; their ability to stockpile products before taxation increases; and their ability to challenge the Thai taxation system at the national level.