LET IT BE
Suranand Vejjajiva
Drinking alcoholic beverages has been a way of life for a lot of Thais, to be sanuk, joyful. In normal Thai social life, especially for men and more women today, tung wong, which literally means "forming a circle" around food and spirits, is a practice one can observe in both the rural areas and urban trendy pubs of Bangkok.
So what is the fuss about Thai Beverage Plc (ThaiBev)?
The largest brewery in Southeast Asia and fourth largest distiller in the world applied for listing on the Stock Exchange of Thailand (SET), and had expected to be approved by the Securities Exchange Commission (SEC) today, but last night a further delay appeared certain.
This is the company's third attempt. The first two passed SEC requirements but was strongly opposed by an alliance formed between grassroots, religious and non-governmental organisations. The failed attempt in 2005 led ThaiBev to decide on listing in Singapore (SGX-ST) instead.
From a purely business perspective, of course, it makes sense.
The company will offer 80 million shares of common stock to investors. If approved, it will be dual-listed in two markets. ThaiBev will be among the top 10 in terms of market capitalisation, making traders happy in this time of economic malaise.
ThaiBev claims to employ more than 22,000 people, not counting outsourcers and distributors up and down the value chain. It pays over 50 billion baht annually in corporate and excise taxes, amounting to approximately 4% of all taxes collected by the Thai government.
It also has a high-profile corporate social responsibility (CSR) programme, from sponsoring sports, education, arts and culture, to disaster relief and even giving out blankets to the poor in winter.
But critics remain disturbed. Full-page newspaper advertisements were bought and protests organised. A rally was held in front of the SET.
What worries the demonstrators is that the raised funds will certainly be used to increase production, which will eventually translate into increased consumption.
Concerns are argued on moral grounds, practical economics, health and social issues. Convincing statistics and academic studies are shown.
First and foremost, Thailand is a Buddhist nation which teaches the Five Precepts, one of them being not to take intoxicating substances. The nation is thus in a moral conflict within itself in this matter.
In addition, while drinking can be fun, too much of a good (or bad) thing can destroy one's life. Short-term health can be affected through accidents, while long-term through alcohol-related diseases.
One's financial stability can disappear down the bottle. Social problems are not far behind.
According to the Centre for Alcohol Studies, Thailand is reported to have the highest alcohol intake in Asia, followed by Korea and Japan. Intoxication is the leading cause of road accidents (72.7%) killing 14,000 and injuring 900,000 people annually, and leading to property damage (45.3%), rape and sexual assaults (20.8%).
In recent years, drinking among teenagers 15-19 years old has increased by 45%, and among women by 30%. Around 60 alcohol-related diseases include liver, colonic cancer and brain damage. Among those who drink regularly, 59.1% suffer from high stress, 48.6% from chronic depression, 11.9% are suicide risks and 11.3% have murderous tendencies. Violence in households increases four-fold.
The government collects a total of around 72.9 billion baht in taxes from the industry each year, compared with the estimated economic loss of 150.6 billion baht from the problems mentioned above. At the same time, people spend more than 200 billion baht annually on alcohol consumption.
There are also opportunities lost. Funds raised in the stock market could be invested in a more productive industry such as agriculture, water management and alternative energy.
So, are we a nation with a drinking problem? And by preventing ThaiBev from being listed, will we reverse the trend? No matter what, ThaiBev will probably be allowed to list anyway eventually, since there are no "moral requirements" in the SEC rules and the company had satisfied all the legal and financial requirements.
The government is complacent. As a matter of fact, any government, past or present, has never set a policy to contain the industry. Government officials and technocrats basically looked at the bottom line, in monetary terms, especially the tax revenue. It is also widely believed that the industry is a major contributor in bankrolling political parties and has politicians on both sides of the aisle.
The Alcoholic and Beverage Control Act, effective earlier this year, is a novel attempt to deal with the problem. The issue, however, is one of enforcement, or lack of it.
The allowable drinking age here is 20 years, but enter any popular pub in Bangkok and you'll wonder why they look so young. Pubs and beer bars are also lined up next to schools and universities, which is illegal. One cannot drink alcoholic beverages in public parks and temples, but who keeps an eye out there?
Advertising must be banned from all public places, including product logos in event sponsorship programmes. It takes only five minutes to get a liquor licence and the Excise Department gives out 600,000 licences per year. Too many outlets, continuous stimulation through subtle sales campaigns and cheap prices - all add up to too much marketing activity and too high a consumption.
Most important is how to calculate the true cost of economic externalities caused by the industry. This will be the basis for a higher "sin tax" collected and to be used in advertisement and public relations campaigns to create awareness about the toxic nature of alcohol consumption. It should even cover accident damages, healthcare and rehabilitation costs incurred.
The government has a responsibility towards society, to maintain decency and quality of life of the population, and to direct limited resources towards productive sectors. The lack of a clear policy towards the brewery and distilling industry reflects both a lack of understanding, at best, and a conflict of interest, at worst.
Suranand Vejjajiva served in the Thaksin Shinawatra cabinet and is now a political analyst.
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