Bill to Promote Small-sized Breweries and Distilleries (Thailand)

Comparison between the Current Regulations and the Proposed Amendment

Basically, to produce alcoholic beverage in Thailand, producers are required to have a liquor production permit granted by the Excise Department. Presently, the eligibility and criteria of permit holders are stipulated in Section 153 of Excise Tax Act of 2017 (“Excise Act”) and Ministerial Regulation concerning Liquor Production Permission of 2017 dated 12 September 2017 (“Ministerial Regulation”).

However, if the Bill passes every stage of scrutiny in the Parliament, Section 153 of the Excise Act may be amended as follows:

If the Bill becomes effective, the following criteria and conditions for production of alcoholic beverages for commercial purpose as stipulated under the Ministerial Regulation may be removed:

• The permitted applicant must be a company with minimum registered capital of THB 10,000,000※3;
• The minimum production capacity for beer must be 10,000,000 liters per year※4. However, if the beer will be produced and sold on-site, the minimum production capacity must be 100,000 to 1,000,000 million liters per year※5;
• The minimum production capacity for whisky, brandy, and gin must be 30,000 liters per day※6; and
• Factory for producing fermented liquor (except beer) or distilled liquor in the local community must use machinery with combined horsepower less than 5 and employ employees less than 7 persons※7.

Status of the Bill and Possible Development

The Bill was accepted in principle by the House of Representatives on 8 June 2022. Presently, the Bill is under the consideration of the special committee and will be re-submitted to the House of Representatives for a resolution. If the House of Representatives accepts the Bill, it will be sent to the Senate for a resolution, processed for the Royal signature and finally published in the Government Gazette for enforcement.

Conclusion

The development of the Bill aims to lower threshold for applying for a liquor production permit. It is expected to be a first step to end a liquor production oligopoly in Thailand and open an opportunity for new breweries and distilleries to compete in the Thai alcoholic beverage market. We advise the current alcoholic beverage producers and investors to follow this development due to the impact it may have on this industry in the future.