Liquor Industry: Empowering Small-Scale Producers

Introduction:

Alcohol production in Thailand is a vital part of the economy, deeply rooted in local culture, traditional knowledge, and agriculture. The Liquor Act B.E. 2493 (1950) has long governed the sector with stringent licensing requirements, such as minimum machinery size, employee numbers, and capital investment. These rules have favored large corporations, creating significant barriers for small-scale producers and stifling competition and innovation.

To address these challenges, the Thai government introduced the Ministerial Regulation on the Production of Liquor B.E. 2565 (2022), which aimed to simplify licensing and support small and medium enterprises (SMEs) and community-based producers. Building on this, the Draft Ministerial Regulation on the Production of Liquor (No. ..), B.E. …. (the “Draft Ministerial Regulation“), approved by the Thai Cabinet on May 13, 2025, further advances these reforms by promoting inclusivity and sustainability in the liquor industry.

Recent Developments in the Draft Ministerial Regulation:

The Draft Ministerial Regulation, proposed by the Ministry of Finance, underwent public consultation from December 25, 2024, to January 9, 2025, via the Excise Department’s website and Thailand’s central legal portal. It seeks to balance high production standards with increased support for local enterprises, including agricultural cooperatives and small-scale producers. The regulation aims to foster fair competition, integrate local wisdom, and promote Thailand’s soft power through cultural and creative industries while aligning with the ease of doing business policy.

Key Amendments in the Draft Ministerial Regulation:

1. Relaxed Location Restrictions for Distilleries

   Previously, small and medium scale distilleries were required to be located at least 100 meters from public water sources. The Draft Ministerial Regulation allows distilleries to operate closer if they install wastewater treatment systems meeting Excise Department environmental standards, reducing barriers for small producers.

2. Elimination of the One-Year Progression Requirement

   Medium-scale producers no longer need to operate as small-scale facilities for one year before applying for a production license. This streamlines the licensing process, making it easier for new entrants to join the market.

3. Support for Craft Beer and Fresh Beer Markets

   Breweries producing fresh beer can now distribute their products off-site in designated containers like kegs, creating new opportunities for Thailand’s growing craft beer industry.

4. Updated Terminology for Clarity

   The term “industrial fermented liquor facility for on-site beer sales” has been replaced with “fresh beer industrial facility” to better align with modern craft beer business practices, improving regulatory clarity.

Alignment with Broader Reforms:

The Ministerial Regulation on the Production of Liquor B.E. 2565 (2022) laid the groundwork for liberalizing the liquor industry, but small producers still faced challenges. The Draft Ministerial Regulation builds on this by further easing restrictions and complements proposed legislative reforms, such as the Draft Progressive Liquor Law, the Draft United Thai Liquor Law, and the Draft Community Liquor Law. Together, these initiatives aim to create a more open, competitive, and diverse liquor industry.

 Conclusion:

The Draft Ministerial Regulation marks a pivotal step toward revitalizing Thailand’s liquor industry by empowering small-scale and community-based producers. By reducing regulatory hurdles and promoting local entrepreneurship, it fosters innovation and cultural preservation while enhancing economic opportunities. Stakeholders, including small producers and entrepreneurs, should monitor the Draft Ministerial Regulation’s finalization and implementation to ensure compliance and seize emerging opportunities.