Buying wine in Thailand these days, there is an abundant choice. Driven by a very large and buoyant tourism market (at least up until the last year) and increased awareness and consumption of wines by Thais, Thailand’s wine culture is growing.
Consumption of alcoholic beverages across Thailand is around 3.5 billion litres per year. Around 75 per cent of volume consumed is beer, followed by locally produced white spirits. Imported wines account for around 1.5 per cent of alcohol consumption – but between 10 per cent to 15 per cent value.
In general, Thais prefer strong, bold, punchy and heavier wines. The best-selling varieties are Shiraz and Shiraz blends. Imported wines come from France, Australia, New Zealand, USA, Chile, Spain, South Africa, and other countries.
Before any wines can be imported into Thailand, each individual wine label must be registered with the Excise Department of the Ministry of Finance in Thailand. Once the registration is complete, an import permit will be issued allowing that particular company to import the wine. Only a Thai company can register a wine and apply for an import permit.
New arrivals into Thailand are usually shocked by how much more expensive wine is in Thailand compared with their home country. It is typically sold in supermarkets and wine stores at a local equivalent retail price range of 300 baht (c. US$10) to 600 baht (c. US$20) – and upwards. When ordered in a restaurant these retail prices can be more than doubled.
This is almost entirely due to Thailand’s heavy and complex alcohol excise and tax regime. In addition to import tariffs, imported wines are subject to a whole range of other duties, fees and taxes:
- Alcohol Excise tax: the rate is 1,500 baht per litre of alcoholic content for a wine bottle not exceeding 1,000 baht (retail). Wine priced higher than 1,000 baht (at retail) will be taxed at 10 per cent of its price plus 1,500 baht per litre of alcoholic content.
- Surcharge / Special duty (US$ 10 per import lot)
- Customs Fee US$ 50
- Municipal / interior tax: 10 per cent
- Health support project: 2 per cent, based on CIF/FOB value
- Public broadcasting subsidy: 2 per cent
- Elderly foundation tax: 1.5 per cent
- Value added tax (VAT): 7 per cent, based on retail price.
This regime results in most imported wines being very heavily taxed. Australian, New Zealand and Chilean wines can often be cheaper because of free trade agreements which have allowed lower import taxes and tariffs on imports from these countries.
In addition, it is not always clear exactly what wine you are paying for. Even local residents find the wine labelling system confusing.
Bottles of genuine 100% grape wine feature a blue excise stamp on the cap.
Locally blended wines have an orange stamp.
Local blends are made from about half real wine and the other half fruit wine in order to reduce tax from, say, 60 % to 25 %. On the front label nothing is written in English to inform you about this. Only the word Fruit Wine on the label on the back of the bottle, written in small font-size. Legally the label must state the fruit with which the wine is blended, and this is usually written in Thai to conform to the law.
So, after you learn about this you will look carefully for the blue or orange stamp on the cap. If you want 100 % imported grape wine you will choose those bottles with blue stamps. If you want to restrict your budget, and it is acceptable to you that you will drink half grape wine, then you will pay around 300 Baht for an orange stamp.
For example, in the photo below, the label says that it is Cabernet Sauvignon from California. But the orange stamp tells us that it is a blend of this wine and other fruit. So on the back the label says that it is Red Fruit Wine.
However! Take a look at the photo below showing two bottles of blue-stamped wines. The one on the left is Jacob’s Creek Chardonnay. But what is the one on the right? A closer inspection reveals that it is some white wine from Australia with no mention of grape variety, although vintage 2012 is stated. From the back label we can see that this wine was blended with fruit wine made from passion fruit. It was imported from Vietnam.
So, when ordering or buying wine in Thailand, do take care to check exactly what it is you are paying for. If you cannot read Thai, ask a Thai person to explain that important back label for you.