The wine market in Thailand has suffered numerous setbacks since the beginning of the pandemic, namely various alcohol restrictions, the banning of online sales, the lack of foreign tourists and an overall drop in consumer purchasing power, says Yodi Mootoosamy, general manager at Penfolds International.
"The Thai wine market experienced a decline in volume in 2020 after a long period of growth," he said. "This is likely due to the fluctuating restrictions, lockdown measures and border controls during the year," Mr Mootoosamy said.
According to research by the Australian winemaker, over 60% of Thai wine drinkers say their incomes have been impacted by the pandemic, leading to a decrease in spending on alcohol. The firm estimates spending on alcohol to have dropped by 21% per consumer.
Thailand is the largest consumer of wine in Asean, drinking a total of 103.3 million liters in 2020.
While French wines are the most popular, Australian imports have grown in popularity due to the free trade agreement between Thailand and Australia, which significantly reduced import duties.
"There is a growing interest in wine among Thai consumers but the wine categories have been traditionally viewed as intimidating," Mr Mootoosamy said. "There are many brands on the shelf, but many you don't recognise and consumers will resort to pricing as to how to distinguish between wines."
Mr Mootoosamy says wine consumption at home has been growing although overall wine sales have declined.
Australian wines have seen exponential growth driven by coinciding growth in Thailand's food and beverage sector, particularly fine dining in Bangkok, he said. Thailand is the second largest importer of Australian wines in the world.
Mr Mootoosamy said as a result of government restrictions, such as the current ban on the sale of alcohol at restaurants, consumption of wine at home has grown as overall sales declined.
The wine industry took a hit from an almost one month ban of alcohol sales in 2020, a government regulation banning online sales of alcohol products and the on and off restrictions of alcohol sales at restaurants. The lack of foreign tourists, who are more likely to drink wine than locals, also hampered sales in 2020 through to this year.