Thailand considers allowing Stock Market alcohol listings

In a bid to boost market liquidity, the Stock Exchange of Thailand (SET) is considering removing a decades-old informal ban on listing alcoholic beverage companies on the domestic market.

The purpose of such a policy change would be to modernise the bourse, and reflect Thailand’s status as a global tourism hotspot where alcohol plays a key role. 

For decades, the debate as to whether alcohol companies should list on the SET has proved controversial. 

Thai Beverage, Thailand’s largest brewer and distiller, has repeatedly faced obstacles in trying to list on the Bangkok stock exchange.

In 2004, the company, owned by liquor tycoon Charoen Sirivadhanabhakdi, first sought to list. However, opposition from anti-alcohol activists and monks meant it abandoned the move, and listed in Singapore instead.

In 2008, the business once again axed plans to list on the Bangkok stock exchange after further protests from campaigners, who argued that such a listing would encourage alcoholism, which would be at odds with Buddhist principles.

Boosting market liquidity

Today, SET claims that opening the door to alcohol listings could enhance market liquidity, and stop Thai conglomerates from listing on foreign exchanges.

“We urgently need to adjust ourselves before we lose those companies to other overseas stock exchanges,” Kitipong Urapeepatanapong, SET chairman, said in a recent interview.

Thai Beverage Pcl, in addition to the alcohol businesses of Boon Rawd Brewery Co. – the nation’s largest beer maker – and Carabao Group Pcl, are good prospects for new listings, he added.

Urapeepatanapong did not comment on the risk of a fresh wave of protests against alcoholic beverage listings, but he said that the social environment has likely changed.

Analyst backlash

However, the potential policy shift has sparked debate among analysts.

Speaking to Bangkok Post, Kitpon Praipaisarnkit, senior executive vice-president at UOB Kay Hian Securities Thailand, said that while he believed providing more alternatives for investors on the Thai bourse to be the right strategy, he remains skeptical of the industry’s growth outlook.

“I wonder how much large brewers, including ThaiBev, need to raise in additional funding through IPOs for capacity expansion,” Praipaisarnkit said. “The alcoholic beverage market seems to have a limited growth outlook to attract such new listings.”

Instead, he said the SET’s goal should be businesses in high-growth industries called S-curve sectors.

Afternoon alcohol ban axed

In December, Thailand suspended its 2pm-5pm alcohol sales restriction for the first time in more than 50 years, launching a six-month trial aimed at assessing economic and public health impacts.

The move, announced by Deputy Prime Minister Sophon Saram and public health minister Pattana Promphat, is part of a 180-day trial designed to evaluate how extended sales hours affect tourism, consumption patterns and public safety.

Restriction on afternoon sales has been in place since 1972.

Wine takes bigger slice of market

But attitudes surrounding alcohol are evolving. Recent research from IWSR also revealed that Thailand’s robust tourism industry and bustling on-trade are creating new opportunities for drinks brands.

Jalene Teng, IWSR senior market analyst, explained: “Thailand’s beer category is remaining resilient as it is popular with locals and tourists alike, and home-grown brands are increasingly elevating their branding efforts.

“Wine is a growing category, with the market maturing and consumers gravitating towards it – and white spirits such as Tequila, rum, vodka and gin are fast becoming crowd favourites thanks to their huge popularity in cocktail bars.”

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