The predicted impact of the proposed alcohol production deregulation policy on consumption in Thailand

Abstract

Alcohol deregulation has recently been a topic of debate in Thailand, with policymakers weighing the potential economic benefits against public health harms and social concerns. This study estimates the impact on alcohol consumption levels in Thailand if barriers to producing alcoholic beverages are removed. Since the deregulation has not yet been implemented, we employed a randomized survey design for a Volumetric Choice Experiment administered to 1220 individuals, both drinkers and non-drinkers. The "treatment" group (with deregulation) was compared to the "control" group (without deregulation). While respondents in the control group were presented with existing drinks supplied by large producers, respondents in the treatment group were presented with new drinks supplied by small local producers alongside the existing options. Deregulation would introduce a wider variety of drinks, including cheaper local craft beer, white spirits, and brown spirits. Various scenarios of product availability and pricing were validated by experts. Our analysis reveals a 19.93% rise in total annual alcohol per capita consumption (APC), with a statistically significant difference between the treatment and control groups at a 90% confidence level. Further exploration into cross-price elasticities of demand suggests new drinks would partly substitute current options. Policymakers should carefully consider the public health implications, including increased risks of alcohol-related harms, as well as potential economic benefits from market liberalization. Regulatory measures, such as taxation, age restrictions, and public awareness campaigns, may be necessary to mitigate the projected consumption increase and associated social costs.

Keywords: Alcohol deregulation; Consumer behavior; Drinking pattern; Randomized experimental design; Volumetric choice experiments (VCEs).