That was the year that Boon Rawd yelled foul to the newly formed Trade Competition Board, a part of the Commerce Ministry. “We lodge the complaint because we want to make the first case under the Competition Law, and we want it to be a case study on unfair trade practices which are widespread in Thailand,” said Santi Bhirombaskdi, the man whose family held a virtual monopoly on beer production and sales for more than sixty years and forbade its agents to buy Chang when it was introduced. The irony likely was not lost on Dr. Supachai Panichpakdi, then the former commerce minister (and later the chief of the World Trade Organization). In his ruling, Charoen and Chang won the day.
One anti-trust officer said it was obvious that the distiller had resorted to predatory pricing, an unfair practice where one company, usually a big one with deep pockets, sells its product at an unsustainable low price calculated to cause its competitors, especially smaller ones, to bleed red ink until they went out of business. So what Charoen did might have been unfair, but it wasn’t clear, the board ruled, that it was illegal according to existing statute.
Boon Rawd did what it could to pick up the pieces, introducing brands called Leo (named not for the lion, but the spotted leopard, another big cat never seen in Thailand) and Super Leo, and then Super Lion to replace Super Leo, subsequently phasing out Super Lion and reintroducing it as Thai Beer. It also launched Singha Gold (a light beer) and then in 2004, Singha 70 to mark its seventieth anniversary. It hired an ad agency to produce a series of TV commercials exposing Chang’s questionable marketing practices and then enlisted three Thai boxing legends to endorse the beer in another series of spots. (A reaction to Chang’s using Ad Carabao, Thailand’s most popular rock musician.) It sponsored an Emmy nominated Thai cooking show in the United States. It launched a blend of beer with tequila. Finally, it reduced Singha’s strong alcohol content and bitter “hoppy” taste.
As beer consumption increased in Thailand, Singha sales by unit count improved, but in 2001, Chang’s market share was at seventy five percent, and Singha and Leo each stood at eleven per cent.
That was the year that Chang delivered the unkindest cut and proposed a merger of the companies. It would be a “merger of equals,” said the oyster vendor’s son, with each firm owning fifty percent. Santi surprised no one when he said it was “impossible both from the heart and for business reasons.” Chang was in a stronger financial position and had the better distribution network, so who, Santi surely asked himself, would end up running the show? Besides, he said, the government probably would reject such a proposal as being too monopolistic. Instead, Santi announced he was seeking an alliance with a foreign brewer to help with his large debt load and lost market share and to improve the company’s export capability.
As the beer market continued to open up, more new local brands and international labels gained distribution and by 2004 the supermarket where I shopped had six local beers and a surprising twenty-two imports from ten countries (some of them locally produced under franchise): Tiger from Singapore; Victoria Bitter, Fosters, and Crown Lager from Australia (plus a beer-tequila mix called Mez); Budweiser and Miller from the United States; Corona from Mexico; Asahi from Japan; Heineken and Grolsch from the Netherlands; Strongbow and Chimay from Belgium (the latter brewed by Trappist monks); Menabrea from Italy; Guinness from Ireland; and Kloster, Weihenstephaner, Erdinger, Veltins, Furstenberb,Warsteiner, and Diebels from Germany.
By 2004, Charoenhad put his children in charge of the beer business as he diversified, acquiring the local offices of the John Hancock Life Insurance and Southeast Insurance, a service affiliate of Bangkok Bank, Berli Jucker (originally a Swiss company and now Thailand’s largest bottle maker), and NCC Management Company, which operated the Queen Sirikit National Convention Centre. He also owned the Hotel Plaza Athenée, the Imperial Queen’s Park Hotel and other hotels in the Imperial Group, a controlling stake in the Lao Brewery in Vientiane, and Dho-Spaak Communication, the holder of the World Cup broadcasting rights in Thailand.
Singha was hanging in there. Sales of Singha, Beer Thai, and a mid-priced brew called Mittweida introduced to compete with Heineken hadn’t much improved, but the Bahirombhakdi family survived Charoen’s assault on its control of the bottled water market and in 2004, one of the more visible heirs, a grandson of the founder, surfaced on an interesting quest. Chutinant Bhirombhakdi was perhaps best known as a keen sportsman, a promoter of the martial art tae kwon do and a handgun sharpshooter. In 2003, he also acted in a television series. The next year he enrolled in class in the National Defense College, an elite military school that gave business executives, civil servants, and social leaders a chance to return to academic life.
Participants had to write a thesis and Chutinant picked as his subject Thailand’s competition law. In an early draft, quoted in The Nation (Apr. 7, 2004), he wrote that “…Thailand has been on its way to amending, adapting and adopting international trade practices since the days of King Rama V… The Trade Competition Act of 1999 is the latest revision concerning domestic markets, which are now under international scrutiny. But since its inception, many feel that the Act has not had as big an impact as originally envisioned, lacking major substance.”
I’m sure he’s right. Surely he has a reason to think that.
As for me, I drink Chang. I can find it just about everywhere, it suits my tastes better than Singha, it still has the kick of a mule, and it’s cheaper than all the rest.
But, sorry to say, it ain’t a world-class beer.
Faking It
In the final months of 2001, a lot of Thais raised hell about an American scientist who was alleged to have sneaked some of Thailand’s delicious jasmine, or hom mali, rice back to the United States, where he planned to mess with its genes and patent it. Why you should get a patent on something Mother Nature provides, with or without genetic modification, I don’t fully comprehend, but the issue here is that many Thais were furious… as they were again in 2004 when it was learned that genetic tests on rice cultivated in and marketed by neighboring Cambodia was identical to that grown across the border in its Thai birthplace.
The fear of “stolen” rice is not the only fret. The government’s Intellectual Property Department’s knickers also were in a twist over complaints about the liberal use of the words phad Thai overseas to describe the traditional local noodle dish. No sooner was that out of the headlines—it was concluded that protection of fried noodles was a lost cause—then concerned citizens started worrying about guarding the name and model of the samlor, or tuk-tuk, the noisy little three-wheeled vehicles that dart in and out of traffic mainly in areas popular with tourists and shoppers.
Again, it seemed to be too late, as tuk-tuk trademarks had been taken out in several foreign countries. A British company that imported the vehicles, MMW Imports, already was modifying and selling them under the MMW Tuk Tuk brand. The company, which declined to reveal the identity of its Thai supplier, was upgrading the tuk-tuks to the standards required to run on European highways—no easy task, according to the firm’s boss— thereby creating, in effect, a new vehicle.
What made these stories about Thailand and charges of alleged theft interesting was the Thais’ hostile response to the idea that someone might be stealing from them. While at the same time, Thailand was one of the centers of international theft, a country where virtually everything was counterfeited and sold on the open marketplace.