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Mon, October 30, 2006 : Last updated 20:47 pm (Thai local time)



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Home > Business > Not yet crying in their beer





STREET WISE
Not yet crying in their beer

It has always been wise to refrain from commenting on something you really don't know about.

Certainly, Thai Beverage Plc has been doing just that as to the strict advertising ban that many are expecting to lay into the operations of the company and those of other alcohol-producers and distributors.

In a filing to the Singapore Exchange Securities Trading Ltd signed by its president Samut Hatthasing, Thai Beverage admits the ban will have short-term and long-term impacts on the industry.

What's interesting is that it expects "neutral to positive" impact on sales volume in the short run, as key products - beer and spirits - dominate the segment with minimal advertising as it is, above-the-line spending on advertising accounting for only a small portion of total marketing and promotional expenses annually. It foresees greater damage to premium brands, which rely heavily on advertising, as well as to new launches.

Admitting that television advertising is by far the most effective for a new product, Thai Beverage said it had a strong portfolio of well-known brands that gave it a clear advantage over competitors or new entrants.

Thai Beverage is, then, quite clear about the short-term impact, but at the end of the filing it says: "The exact nature of the long-term effect on consumption has yet to be determined … Since Thailand is the first country to consider such strict measures, it is too early to assess the exact effect this will have on overall alcoholic-beverage consumption."

Indeed nobody is sure what will happen when the ad ban comes into effect on December 3, if the deadline is stuck to. All parties are holding meetings and press conferences on an almost daily basis to try and figure out what to do to stay in business.

Nor are the companies the only ones seeking clear, practical solutions: drinkers too are scratching their heads.

Proponents of the bill first proposed a drinking age of 25; two days later they dropped it to 18; then it bobbed back up to 20. Blowed if I can guess what it'll be when it gets signed into law.

You used to know whether you were old enough to drink; now you have to wait to be told.

achara_d@nationgroup.com








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