NAKHON RATCHASIMA – The GranMonte winery in Khao Yai worried that the government’s decision to lift import duties on foreign wines will lead to a flood of European wines that will crush the Thai wine market. They are calling on the government to take measures to reduce production costs and relax laws that hinder competition.
On January 5, 2024, Ms. Suvisut Lohitnavy, Director of Marketing and Public Relations of GranMonte Vineyard and Winery, a vineyard and wine producer in Khao Yai, Nakhon Ratchasima province, expressed her opinion that the government’s recent measures that have reduced taxes on grape wines are a good thing, but that there are more concerns when looking at the big picture.
With the new tax rates, import duties on foreign wines will also be abolished. Normally, many foreign wines that have free trade agreements with Thailand do not have to pay import duties, such as Australian, New Zealand and Chilean wines. These wines will only benefit from the reduction in excise duties.
However, wines from European countries such as France, Italy and Portugal, most of which are high-quality wines, were previously subject to high import duties of around 50-60 percent of the price. By waiving import duties, they benefit fully and also receive a double reduction in excise duties.
This has caused great concern among Thai wine producers. They fear that European wines will flood the Thai market and make it difficult for Thai producers to compete. European producers have cutting-edge technology, large production volumes and lower costs than Thai producers.
Wine production in Thailand is limited to a few producers who grow their own grapes. The GranMonte Winery in Khao Yai, for example, grows its own grapes and produces its wine exclusively using local methods. However, the cost of growing grapes increases every year as the prices of fertilizers, pesticides and fuel rise. The government has not taken any measures to mitigate the impact on Thai wine producers.
In addition, there are problems with various laws, in particular the laws on advertising and promotion in the media. In many countries there are not as many restrictions as in Thailand. In some countries, alcohol is even advertised. Japan, for example, which inspired Thailand’s OTOP program, openly promotes local alcoholic beverages.
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