Thai Beverage - CGS-CIMB Research 2024-01-03: Thai Government To Cut Alcohol Excise Tax

• As part of the plan to spur tourism in Thailand, the Thai cabinet had, on 2 Jan 24, approved tax cuts on alcoholic beverages. The tax measures are expected to take effect shortly, once the ministerial regulation is published, and will expire at the end of this year.

Alcohol tax cuts approved to spur tourism

• - Read this at SGinvestors.io -
• reducing excise taxes on wine from 10% to 5%, and
• eliminating taxes on local spirits (10% previously).
• Excise tax on entertainment venues will also be halved from 10% to 5%.

According to Lavaron Sangsnit, permanent secretary of the Ministry of Finance, the lower tax revenue from excise tax cuts would be offset by higher tourist spending.

The tax cuts follow Thailand’s decision to extend operating hours for entertainment venues to 4 am in Bangkok and other key tourist destinations since Nov 2023.

New measures a positive for Thai Bev

• - Read this at SGinvestors.io -
• We expect Thai Beverage (SGX:Y92) to only partially pass on the lowered excise taxes (in the form of lower retail pricing) to consumers, given:
  1. the time-limited nature of the measures, and
  2. likely higher input costs for spirits in FY24F.

Reiterate ADD

• Read more at SGinvestors.io.

ONG Khang Chuen CFA CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | https://www.cgs-cimb.com 2024-01-03 SGinvestors.io

---