Samui Wining & Dining
A Taxing Business

Black Forest share the challenges of importing alcohol in Thailand.

 

5Wine is not really the drink of choice in Thailand and most of what you see is imported. Even though Thailand does produce its own wine, it is quite expensive and is mostly exported to other countries. Tourists who arrive in Thailand are probably used to enjoying a glass of wine with their meals, be it a pizza or a three-course dinner at a fancy hotel, and are often shocked when they discover that sometimes the wine costs more than the food itself.

      Black Forest Distribution was founded in 1994 on Phuket, by German expat Hans-Peter Blumer who, after getting tired of trying to find a decent wine on the island, decided to start importing quality wines from abroad. Since then he has expanded to importing spirits and beers too, always getting the best quality and making sure all his products have the best price possible for his customers.

      But, as Samui branch manager, Matthias Gerbert, explains, this in itself can be a bit of a challenge. “All wine is expensive here because of the huge import tax,” he says. “Imported wines will have another 400% or so put on top of the original purchase price. That’s a lot of money to pay, even before we add in the costs of the business and warehousing. So wine can be hard to buy and sell here.”

      Matthias goes on to explain, “Tourists are charged a lot for wine here, especially if they don't know where to look for the best prices. Hotels and restaurants need to realise that many people go out at night for a meal and even if they’re ordering pizza or pasta, they’ll probably want a glass of wine with it, or a bottle to share. They can opt for the house wine, which should be reasonably priced. But sometimes there’s such a high mark-up by the restaurant that it just prices customers out.”

      Sigh - we all love paying our taxes. Even when it’s deducted from our salaries each month, we understand that it’s all used for the good of all mankind. Isn’t it? We all know that taxes are part of everyday life, and most of the time we learn to live with them. But when they start to do more harm than good, we start to question the motives of those creating the rules.

       At the beginning of September 2013, the Thai government announced a revised alcohol tax structure based on a new calculation method. The new structure uses the last wholesale price excluding value-added tax (VAT) instead of ex-factory prices, as used in the old formula, and is worked out using three elements: value or price, alcohol content and volume. They pointed out the change will make the competition between local and imported products fairer in terms of prices. Various businesses have criticised the new alcohol excise tax structure as unfair.

      Tax for beer is 48% while the tax for white spirit is only 4%. The tax on wine changes by how much the bottle originally costs and other drinks have their tax charged according to what percentage alcohol they contain, it’s all very confusing.

       But how would this affect companies like Black Forest. They’ve been operating for nearly 20 years now and are experts in their field. They have an established customer base, and for years they have always made sure that they were able to offer great prices for their customers. But in situations like this, their hands are truly tied. Their goal was to bring good quality wines to the island of Samui for people to enjoy, but the changes in the tax laws might start to make this very difficult.

         It’s a terrible shame because even though people enjoy cocktails on this beautiful island, there are many restaurants that buy their wines from Black Forest and are pleased to be able to offer a good selection of international wines at very competitive prices. With the tax increases, will guests be forced to stop drinking wine altogether? Will the new laws force them to drink the local beers like the government is hoping? Or is the government hoping that people will continue to drink wine and therefore pay the increased prices? How much would you be willing to pay for a bottle of a good French red with your steak or a bottle dry white wine with your pasta? It just won’t be the same enjoying succulent lobster without a glass of crisp white wine. A beer just won’t cut it.

         Is this the end of the wine import business in Thailand? I don’t know, but what I do know is that whatever happens, Black Forest will always work to get the best price for their products and they are absolutely willing to fight to the end if need be.

         

Colleen Setchell


 


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