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Craft beer in Thailand

WishBeer_May27_AOne of the more common buzzwords of the beer industry is ‘craft beer’. In countries like the US, Canada, Japan and the UK, beer drinkers are starting to take notice of the large number of beers available that aren’t made by big brewers. As beer drinkers, there is a good chance that you have heard of some of the numerous craft beers, and even tried some. But, do you know what craft beer is and why don’t we see much of it in Thailand?

What is craft beer?
Craft beer is one of, if not the most, popular industry buzzwords, but, many have a hard time nailing down exactly what it is. At its simplest, craft beer is any beer not brewed by a large corporation brewery like ThaiBev’s Chang.

To take the definition deeper, the American Brewers Association defines a craft brewery as, “Small, independent and traditional.” This means they produce less than six million barrels (around 700,000,000 Liters) of beer and less than 25% of the company is owned by another producer who is not a craft brewer.

One of the major hallmarks of a craft brewery is innovation. Take a look at the beers like Rogue’s Juniper Pale Ale, Hitachino’s Red Rice Ale or Brewdog’s Punk IPA which have been instrumental in changing not only the perception of ‘beer’ in their local regions but have pushed the boundaries of beer styles.

Because many craft brewers aren’t rigid companies like say InBev (who are responsible for products like Budweiser, Hoegaarden, etc.) they can afford to be a little more adventurous with their product. It is because of craft brewers that we’ve seen the incredible success of the IPA in the Western US, the pale ale in the Eastern US and even the various Belgian style ales seen worldwide.

Now we aren’t saying the macro beers are bad, they still make up the bulk of beer sold and consumed, but craft beer is serving to bring diversification and new products to markets around the world. This, and what is seen to be a largely superior product, has led to craft brewers increasing their market share nearly worldwide. We say ‘nearly’ because there are still some countries that are well behind on this trend. Thailand included.

Craft beer in Thailand
While craft beer is booming in many parts of the world, the craft beer market in Thailand has remained largely an ‘import only’ affair. Sure, there are an increasingly large number of bars opening around the country focused on craft beer, but almost all of it is imported. While imported craft beer is amazing, the question recently asked by a reader is: Where is the ‘Thai craft beer’ market?

As we sat around the office talking about this the other day, we found that the answer was a heck of a lot more complicated than it should be. Here are two major reasons why we think the local craft beer market in Thailand hasn’t taken off like in other countries:

1. The law
According to Section 5 of the Liquors act of 1950, the distilling and fermentation of alcohol for consumption and sale is illegal. In other words: Unlicensed brewing – like what you would do at home – is illegal, even if it is for personal consumption. As with any law, the wording is a bit ambiguous as the same law later states that the penalties for brewing beer are actually quite low – THB 200 for brewing and THB 5,000 for selling it.

When it comes to businesses that actually sell beer and aren’t major breweries, the law states that they can brew beer but only if it is consumed onsite. This explains why you can’t see any Londoner Pilsner or Tawandang Dunkel on supermarket shelves. From the looks of it, this law will not change anytime soon.

2. The climate and resources
Another reason you don’t see much of a local craft beer scene is that Thailand’s climate isn’t the greatest for brewing beer. If you want to brew a lager, you need temperatures near zero Celsius, which means you are facing potentially massive cooling costs.

Beyond that, three of the four main ingredients (hops, barley and yeast) are not naturally grown in Thailand, which means they will need to be imported. And anyone who has tried to import anything into Thailand knows that import taxes can be steep.

So, a fairly strict (some would say Draconian) law combined with a climate that isn’t great for brewing beer and potentially massive import taxes puts brewing a profitable beer out of the reach of the masses for the time being. So, for the time being, the Thai beer market is reliant on imports for the vast majority of craft beer.

We think this isn’t necessarily a bad thing, as there is some pretty damn amazing craft beer out there, but it sure would be nice to see this revolution hit Thailand.

Wish of the week
Brewdog Dead Pony Club
Brewdog is well known beer that take the traditional styles and kick them to the kurb. The Dead Pony Club is no exception. It’s a hopped up California pale ale that goes down smooth and is incredibly balanced. Imagine a nice crisp light ale with a citrus punch and that is the Dead Pony Club. It will leave you satisfied yet wanting more. Try one, or six, today!

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2 Responses

  1. So what is the condition to become an official brewery? It can’t be impossible since they do exist. I don’t think cooling costs would be massive since you only have to cool down the storage barrels and not every beer type need close to zero degrees.
    Also what about Phuket Beer?

    But great article, i have wondered the same thing for some time now.

  2. Rob McBroom says:

    Hi Jan,
    Thanks for commenting. It was an interesting article to research and write.

    You’re right, cooling costs wouldn’t be “massive” but they would factor into how profitable the beer/brewer is. The reason for this is because efficient cooling at specific brewing stages is essential.

    For example, many strains of yeast are actually quite sensitive to temperature during fermentation. At higher than usual fermentation temperatures (above 13 Celsius for Lagers and 22 Celsius for Ales) you could see finished product with high amounts of esters (what give beer a fruity smell; excessive amounts will make beer smell like ripe bananas) and Fusel Oils/Alcohol which could cause a wide variety of problems including amplifying your hangover.

    Therefore the brewer needs to ensure stable temperatures, which means environmental control.

    As to opening a brewery here in Thailand: Check out this page (http://morebeer.com/brewingtechniques/library/backissues/issue6.2/diebolt_sb.html) which gives a rough cost estimate of brewing 10-Bbl of beer (1,192 Liters) in the US. It’s not excessive, but here in Thailand you have to factor in the cost of importing ingredients, overhead, purchasing the equipment which would likely be imported, and most of all the high taxes on the imported goods and the beer itself.

    I also found an interesting forum post on homebrewthailand.com (http://goo.gl/bB3aL). Take a look at the 7th reply, that could help explain the costs. From what I can see, it’s simply not worth it for the vast majority of us.

    Phuket Beer is an interesting product, the brewery is actually owned by a private equity firm – Leopard Capital. I would therefore assume they have a decent amount of financial support. It is also exported, so I am sure that helps as well.

    I hope that helps a bit!
    Cheers,
    Rob

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