Thailand: Microbreweries gaining entry into Thailand’s beer industry

Thailand's 150 billion-baht (S$6.1-billion) beer market is controlled by two large companies: Boon Rawd, producer of Singha, and ThaiBev, producer of Chang, which between them garner a 90 per cent market share.

Still, despite the odds stacked against them, microbrewers are gaining entry into the industry, brewing uniquely flavoured craft beer that retails at four to five times the price of common lager found in convenience shops, The Straits Times reported on July 7.

Mr Wichit Saiklao is an unlikely upstart, having failed on his first attempt to brew beer five years ago using a DIY home-brewing kit. He forgot to add the yeast.

He finally succeeded on his third attempt. "My friend said while drinking: 'Chit, am I sitting somewhere in Germany or in some Bavarian field?'"

After that, Mr Wichit, 46, an electrical engineer, was inspired to continue brewing from a friend's house on Koh Kret island, about 24 km up the Chao Phraya river from central Bangkok.

He thought he would pursue beer brewing as a hobby upon retirement. But his plan got pushed two decades forward as word spread and people started flocking to the island to sample his home brews, aptly named Chit Beer.

But he soon ran into another hitch.

He discovered he needed a licence to brew beer. And Thai regulations state that licences can be issued only to brewers that produce at least 100,000 litres a year and have a paid-up capital of at least 10 million baht.

Mr Wichit and many of the dozens of microbrewers like him do not qualify.

In December 2016, the maximum penalty for illegal beer production was raised to 100,000 baht, a prison sentence of six months or both. The maximum fine for selling illegal beer was raised to 50,000 baht, while possessing illegal beer carries a maximum fine of 10,000 baht, up from 1,000 baht.

To get around the regulations, some first generation brewers like Mr Panitan Tongsiri, 32, and Mr Piek Pipatnapon, 36, decided to brew their beer in Cambodia and Vietnam respectively and import it back to Thailand legally.

There are now eight Thai brewers that produce their beer in other places such as Taiwan, Australia and Japan.

"If we want to change the law, we have to exist first," said Mr Panitan, who owns beer brand Lamzing. Together with the Sandport and Mahanakhon brands, they set up the Stone Head Thai Craft Beer microbrewery near the eastern Thai border.

As more local brewers enter the scene, more drinkers are discovering the unique flavour of craft beer, such as Mr Kaka Momesok and Ms Som-o Kokim, both 23. They are among Mr Wichit's students at the Brewing Academy that has trained about 1,000 students to date.

"The gap in taste is huge compared with those beer available at 7-11," said Mr Kaka.

The pair, together with a group of British expats, were bottling beer they brewed a week ago. They would need another week before they can take it home.

But it would take much longer, perhaps another decade, and more than just a growing crowd of craft beer enthusiasts to change the law, said Mr Piek, whose GoldenCoins Taproom bar has even attracted tourists, including Singaporeans. Microbrewers hope to gain more clout once their business grows large enough.

"It's about having a big-scale economy," said Mr Piek. "In America, the price gap is not that big. But here, craft beer can be four to five times more expensive."

Microbrewers also need to import major ingredients from the United States, such as hops or barley, as local farmers seldom grow these.

But last year, brothers Teerapat and Nattachai Ungsriwong, two of Mr Wichit's former students, managed to grow hops - flowers used to flavour beer - in a farm in Nonthaburi, north of Bangkok.

"While others go abroad, I would like to focus on sourcing the ingredients locally," Mr Wichit said. ""The objective is to brew legally in Thailand. We are trying to create an ecosystem to make that happen. I can wait, there's no rush and I can enjoy beer every day in the meantime."

06 July, 2017