Without rubber, we’d have to get along without hot water bottles, life rafts, bathing caps, foam mattresses, raincoats and other all-weather gear, wetsuits for divers and surfers, garden hoses, gaskets and seals and fan belts for cars and buses and trucks, airport conveyor belts, door and car mats, baseballs (the cores are rubber), basketballs, and ping-pong paddles. Bureaucracy everywhere would stumble to a clumsy halt without a rubber stamp. And as for all those you-know-whats essential to family planning and world health, they’d probably be made of plastic or something even unfriendlier.
They are not made in Trang, by the way. Most of those factories are in Chon Buri. Another story for another time.
Thailand’s Beer Wars
There must be a hundred ways to rate a country as “world class,” but my favorite is in the answer to this question: Does it have a great beer? So I guess it wasn’t Thailand’s “greatness” that led me to move there. Even before I visited the country, I didn’t like its beer. In fact, I thought it was quite horrible.
At the time, in the 1980s, I was living in Honolulu where there was a Thai restaurant that imported what was commonly regarded as Thailand’s “national” beer. That was because from the 1930s onwards, the government had given a monopoly to the Boon Rawd Brewery Company Limited of Bangkok, makers of a lager called Singha.
Based on a recipe and technology from Germany and made from locally grown barley and imported hops, the beer whose name meant “lion” (an animal never seen in Asia) had a high alcohol content of six percent and, for my money, too many of those female hop flowers that gave the brew its bitter taste. Of course, it could have been the water, always a determining factor in a beer’s flavor. Singha had its brewery alongside the polluted Chao Phyra River and drew its water from artesian wells, sunk deep beneath the swampy ground on which the city was built, creating an image that was less than reassuring.
When I bellied up to my first Thai bar in 1993, Singha controlled ninety percent of the market and two other locally produced beers, Kloster and Amarit, franchises from the German brewer Beck’s, competed for what was left, mainly selling to tourists and expatriates. Both had less alcohol than Singha and neither had its acrid bite. When in Bangkok, I drank Kloster. However, when I traveled outside the city, there was no choice. If you didn’t drink Singha, you didn’t drink beer. And even if you’d brought some other brand with you and wanted to cool it with ice—in Thailand, men customarily put ice in their beer—the frozen water available was of extremely dubious origin.
Then came one of the greatest shifts in the history of beer marketing. In under ten years, not only were dozens of brands made available, Singha, once in privileged command, was left hanging out to dry with only eleven percent of the market, while an upstart newcomer called Chang (Thai for “elephant”) had a whopping seventy percent! How that was accomplished is not taught in reputable business schools, nor likely would the tactics survive any court test in the developed world. It was, on the other hand, a classic story that illustrated perfectly how trade was conducted in Thailand: ruthlessly.
It was a war waged by two families, one led by a man of inherited riches who coaxed royalty to captain his board, the other by a man with a fourth grade education, the son of a vendor who sold oysters on the street. If novelist James Clavell were alive, this cast of characters and their books of dirty tricks would have offered him material for a sequel to Tai-pan and Shogun.
Boon Rawd, the makers of Singha (or “Singh,” as its loyal drinkers say), was established in 1934 by Phraya Birombhakdi, whose son Prajuab was sent to study beer culture in Germany’s Domen Institute, returning to look after the Singha monopoly. When he died, Santi and Piya Bhirombhakdi took command. For more than half a century, through the Japanese occupation of Thailand and into the 1960s and 1970s when Americans built air bases and ports and roads for the transport of bombs and out-drank the thirstiest of Thais in noisy go-go bars, and thence into the boom years of the 1980s and early 1990s when the Kingdom was listed in the Guinness Book of Records as having the world’s fastest growing economy, Singha was never challenged. The family had built its business on connections with the aristocracy and for a time Adulkit Kittiyakara, brother of Her Majesty the Queen, served as company chairman. Further competition was not allowed. And sales went up, up, up.
Then along came the oyster vendor’s son, Charoen Sirivadhanabhakdi, whose company was given a monopoly of his own, being awarded by the Finance Ministry licenses to all twelve regional whisky distilleries—“whisky” so called but made from fermented rice and sugar cane and thus, in fact, a rum. In rural Thailand, where seventy percent of the population lived, the preferred drink was one of Charoen’s products, named for the Mekhong River that flanked part of the country’s borders with Laos and Cambodia. This drink was colored brown with caramel for the city folk and left “white” (clear) for the rural market, and it was cheaper than beer by far.
Deciding to take on Singha’s dominance, Charoen formed a partnership with Carlsberg when the beer giant from Denmark was given permission to enter Thailand. The original formula was changed, increasing the alcohol content and bitterness, and the international price was reduced—but it still cost more than Singha. They claimed a price premium went with the beer’s international status. New brand, higher price: one thing was very clear—if Carlsberg wanted to topple Singha, it had to sell in volume. Thus, began a marketing war unlike any seen in Thailand before.
Charoen ordered his sales network to push Carlsberg along with all his whiskies, including Saengthip as well as Mekhong, and to tell any Singha agent (retailer) declining to take the beer that it couldn’t buy the popular whisky. The genteel Bhirombhakdi family then told its more than ten thousand agents nationwide that if they so much as sold a single bottle of Carlsberg, they’d lose the right to sell Singha. It was what was called in another part of the world a “Mexican stand-off.” It didn’t last long. Upcountry, if you couldn’t get the whisky your customers wanted, you were, effectively, out of business and as a result, the Singha distribution system disintegrated.
Some later said this was a diversionary tactic, that Charoen all along had planned to introduce a purely “local” brand. Hadn’t he obtained two licenses to produce beer, after all? In any case, in 1994, this is what he did, launching Chang, a brew with a higher alcohol content (6.4 percent compared to Singha’s six percent) and a price so low it didn’t even cover production costs, creating a product that literally delivered more bang for the baht and demanded the attention of the budget beer drinker.
How could he do this and survive? He nearly doubled the price of the whisky and bundled whisky sales and beer sales together: in order to get the whisky, a retailer had to take the package. If you wanted to buy twenty liters of the whisky most popular in the countryside, you also had to buy four cases (forty-eight big bottles) of Chang. In this fashion, the beer loss was covered by the increased cost of the whisky… and the entire nation was saturated with the strongest, cheapest beer ever marketed.
In time, this led many drinkers to change from Charoen’s whisky to his beer. He didn’t care. It was like taking money out of one pocket and putting it in the opposite one. The primary result is that Chang came to dominate the beer market as Singha’s share fell like a bungee jumper. By the end of 1995, Chang acquired seven percent of the market as Singha retreated to eighty two. Chang’s slice of the pie jumped to fourteen percent in 1996, thirty one percent in 1997, thirty two percent the next year, and to more than sixty percent in 1999, sinking Singha’s “one nation, one beer” marketing slogan once and for all.