A sweeping tax exemption on imported wine introduced by the Thai government in early 2024 has led to a sharp rise in wine consumption, particularly among wealthier citizens, while also triggering concerns over economic and social consequences.
According to a new study conducted by researchers from Kasetsart University’s Faculty of Economics, the policy—which slashed import duties from 54–60% and reduced excise taxes—has caused a surge in demand for mid-range and high-end wines. The research, led by Assistant Professor Dr. Mana Laksamee-arunothai and Associate Professor Dr. Chidtawan Chanakul, revealed a 300% increase in consumption of wines priced between 3,001 and 5,000 baht.
While the measure was designed to boost international trade and increase the availability of foreign wines in the local market, the data suggests that the majority of benefits have gone to overseas producers, with the value of imports rising more than 10%. Prices for premium wines have fallen by over 10%, making them more accessible to Thailand’s affluent consumers, while cheaper varieties have seen minimal change.
The financial trade-off has been significant. The Thai government is reportedly losing nearly 600 million baht annually in tax revenue due to the policy. More troubling, the study estimates that the broader social costs linked to increased alcohol consumption—such as traffic accidents, domestic violence, and youth-related issues—could reach over 10.3 billion baht.
These findings have drawn criticism from some quarters. Senator Lae Dilokvidhyarat, speaking at a recent public forum, argued that the decision to waive taxes on imported wine—a product he categorized as a “luxury good”—runs counter to basic economic principles. He warned that the loss in government income, coupled with the long-term public health risks, raises questions about the policy’s viability and broader impact on Thai society.
As debate over the wine tax exemption intensifies, policymakers face growing pressure to balance economic liberalization with the need to protect public health and preserve state revenues.
