Thailand: Proposed alcohol consumption law may breach international trade rules

Thailand's proposed alcohol consumption law may breach international trade rules because its total ad ban is a non-tariff barrier for imported drinks, according to executives of Boon Rawd Brewery Co, which makes Singha beer, Thai Press reported March 16.

Trade partners may challenge Thailand at the World Trade Organisation (WTO), they warned.

Santi Bhirombhakdi, the company's executive director, believes the National Legislative Assembly will finally approve the law. But, he said, ministries including Commerce, Foreign Affairs and Finance should think twice about whether the law meets international trade obligations.

''I would like to ask those ministers whether this would be acceptable in international standards,'' he said on March 15.

Mr Santi is not pleased by the alcohol control law, which he said put the excise tax on white spirits too low. The law would only favour white spirits, a major product of liquor tycoon Charoen Sirivadhanabhakdi, who owns Boon Rawd's chief rival Thai Beverage.

On Tuesday, the Public Health Ministry won cabinet endorsement of its draft law on liquor-consumption control. It would set the minimum age for new drinkers at 20 and impose an around-the-clock ban on ads. This would include trademarks on materials such as chairs and umbrellas, and only exempt commercials that come up on foreign sports programmes.

The ministry failed in its attempt last year to ban alcohol advertising. The Council of State ruled that the ban must come in the form of a law approved by the NLA.

Sudhabodi Sattabusya, Boon Rawd's vice-president, said Sweden had to give up its bans on advertising beverages with more than 2.25% alcohol content because other European Union countries complained that the measure exaggerated trade barriers and was illegitimate. As a result, beers with alcohol content between 5% and 7% are excluded from such controls.

Niphon Puapongsakorn, an economics lecturer at Thammasat University, said the law would not violate WTO rules because so far it simply regulated trade rules at the border without touching internal trade policy, except for domestic subsidies on farm products.

"This would be the case once negotiations on trade competition regarding fair trade practices are settled,'' he said.

Mr Santi said such blanket bans on ads would hurt consumers who would be deprived of new information on the quality of alcohol products. Without marketing competition, alcohol makers would enter into a new price war that would make alcohol cheaper, thus possibly boosting consumption.

Boon Rawd executives wondered if the government could enforce the law from advertising and selling to consuming. They questioned how enforcement would work as currently the government lacks the staff to handle all of the law's aspects.

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