some image

Having fun, writing about the stuff I like

Wine drinking & taxes in Thailand

Oscar Foulkes January 18, 2007 Uncategorized No comments

I have often said that the only way to survive Vinexpo (as a visitor) is to nip outside the interminably long exhibition halls every hour, or so, for a pression – a short draught beer. The 200ml doesn’t affect one’s sobriety, but makes all the difference to a palate that’s being assaulted by dozens of wines per hour. I would probably even admit to hankering after the first icy cold beer at the end of a summer’s day, so my willingness to drink beer is proven.

However, there’s a limit to the number of beers I’m comfortable drinking on any one day, or even consecutive days of drinking beer. Forewarned of the wine situation in Thailand I took the precaution, therefore, of filling 3-litre foil bags with a variety of red and white wines for our three-week end-of-year holiday.

Between import duties and alcohol tax, wine is subject to a whopping 380% surcharge in Thailand. Consequently importers focus most of their attention on the cheapest wines possible – my guess is that the vast majority of wines imported into Thailand leave the cellar door at no more than €1 per bottle.

The wine starts life bad, and doesn’t get any better under tropical storage conditions. The problem is exacerbated by the widely used 5-litre flagons that cannot possibly be consumed before the wine oxidises. The bottom line is an absolutely dreadful wine experience.

Because the wine is bad (and expensive) sales volumes are low, and the wine is guaranteed to go off before it’s left the store.

Fortunately we did most of our dining at beach restaurants. We were therefore able to order a glass of wine, turf it out on the sand, and then surreptitiously re-fill it from the foil bag concealed inside a handbag or rucksack on our laps. Except for the time I mis-aimed the nozzle, resulting in a dribble of red wine down my leg, it worked very well.

I don’t mean to single out Thailand. Many other countries – in Asia especially – tax wine on the basis that it’s a non-essential product mainly being consumed by ex-pats and tourists. Protection of local breweries and distilleries is probably a prime motivation.

But wine is not necessarily interchangeable with beer or bad whisky. And, servicing happy tourists with bad wine can’t be good for business. I wonder, also, what losses are suffered by restaurants, bars and stores in writing off redundant stock.

Let’s take an alternative viewpoint on this. If we take the hypothetical €1 bottle of wine, the Thai government collects €3.80, and the wine costs the importer €4.80 (without logistics costs). If they instead took a flat €2.00, the importer could afford to pay €2.80 for the wine, which would result in infinitely better quality being served.

Or, if he stuck to his original wine, he would be in for €3, and everyone down the line would get a better deal.

In my view, the resulting increased sales volumes would quickly compensate for the duty reduction. More importantly, a country that survives on tourism would have happier visitors (and I wouldn’t need to sneak around with foil bags of wine!).

Add your comment