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Things are slow, and a little bit cheaper, at Laem Singh Beach

Phuket Restaurants Soak Up Sin Taxes

Thursday, May 28, 2009
NOTHING is certain but death and taxes, it is said. For some Phuket restaurants already battling a declining economy, taxes may just be the nail in the coffin.

On May 7, the government raised excise taxes for beer from 55 baht a litre to 60 baht a litre, while tax on white liquor went from 110 baht to 120 baht a litre and blended liquor rose to 300 baht a litre from 280.

Higher taxes on cigarettes and fuel were announced a week later, with the aim to add another 70 billion baht to government coffers.

Four out of five restaurants surveyed by Phuketwan are choosing to absorb all of the higher costs of alcohol and cigarettes in an effort to hang on to their customers.

While some restaurants have seen their fortunes decline by 30 to 50 percent from previous months and years, others are enjoying growth in their business.

Octopus, Nai Yang

Open since: 1986
Opening hours: 11am-10pm, closed 1st and 16th each month
What the management says: We charge 50 baht for a small bottle of Singha beer and 100 baht for a big bottle. Since the tax increases our prices have stayed the same because we want to keep our customers. Guests are still ordering alcoholic drinks. Over the past three months we have had about 60 to 70 percent more customers compared with last year. Most of our customers come from Europe, mostly from nearby hotels on the beach. Restaurants in the area need to increase price for alcohol and cigarettes but all are afraid of negative feedback from customers. Last year, we increased menu prices by around 10-20 per dish.
Comment by Chansit Poonthananiwatkul, Owner

Paknam Seafood, Kuku, Rassada

Open since: 2006
Opening hours: 11am-10.30pm daily
What the management says: We have just raised our prices on beer between 5 and 10 baht, depending on the brand. Liquor was increased by 10 baht per bottle. We have been able to keep our food prices the same because we offer fishing on site which keeps costs low. Customers continue to consume and buy as normal, only a few complaints about the higher prices. Most of our customers are Thai, only 10 percent expats. Many come from Bangkok during school holidays. Our business is up from last year by nearly 20 percent. We're now doing a promotion on jugs of Heineken draught beer, which are normally 135 baht but now only 119 baht.
Comment by Worasake Wanna, Owner

Phuket Brewery, Phuket City

Open since: 2008
Opening hours: 10.30am-midnight daily
What the management says: Since May 15 we have been offering a promotion of 30 percent discount on the beer we brew, the only type of beer we sell. A glass of beer is now 60 baht instead of the usual 90 baht. We don't want customers to pay the extra costs from the government policy. Our customer levels are normal; we have a lot of regular customers, about 70 percent of which are Thai and 30 percent expats or tourists. The end of last year was better than early this year since this year there has been political problems. Prices on food and cigarettes remain the same.
Comment by a Phuket Brewery spokesperson

Alax Restaurant, Laem Singh Beach

Open since: 1984
Opening hours: 8am-5pm daily
What the management says: We are keeping the old prices for cigarettes and alcohol because if we increase the price we will have fewer guests. Last month, our customer numbers were down by around 50 percent from the year before. This month we're getting only a maximum of 15 guests a day, down 30 percent from last year. I always expect this time of year to be slow because of the rainy season, but the flu scare and political problems have made it slower than expected. Other restaurants in Laem Singh appear to be worse off. We sell Singha beer small bottles for 70 baht and big bottle for 130 baht. Previously, on one box of 12 beers we would earn a profit of between 200 and 300 baht. Now, on one box and we get a profit of slightly more than 100 baht. We normally stay open during the rainy season but we are considering to close for a time this year. We also rent sunbathing loungers and used to charge 100 baht a day but now we ask for only 50 baht. Customers now try to bargain prices on loungers, especially if a group comes. They also try to bargain on cigarette and beer prices; sometimes we agree and lower the price.
Comment by Supat Kanpai, Owner

Baan Chom View, Kata Noi

Open since: March 2009
Opening hours: 11am-11pm daily
What the management says: Prices have remained the same for both alcohol and cigarettes. A small bottle of Singha beer is priced at 80 baht and a big bottle is 150 baht. This month, customer numbers are down 40-50 percent from last month. Most customers are mostly Western tourists, about 80 percent, but we get more Thai customers on weekends. This month we have also had customers from China, Malaysia and Singapore. We saw a decline in business after the red-shirt protests, since customers were worried about safety in Thailand.
Comment by Praphaphun Juttuchai, Manager


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