PROSPECTUS THAI BEVERAGE PUBLIC COMPANY LIMITED ...

Part 2 Issuing CompanyThai Beverage Public Company Limitedmarket by sales volume in 2005. Popular brands in Thailand include Johnnie Walker Black Label(produced by Diageo Plc.), Chivas Regal (produced by Pernod Ricard) and VSOP (produced byRegency). The typical retail selling price of a 700 milliliter bottle of imported premium spirits is Baht800 upward depending upon the quality of product.3.2.3 Key Industry TrendsBeerGrowth of economy brands. Sales volumes of economy beer grew at significantly faster ratesthan the beer market as a whole from the period of 1997 to 2007. This growth has been driven bystimulation of the market from competition between the Company and Boon Rawd Brewery Co.,increased advertising and marketing, a shift in consumer demand away from low-priced white spiritsto economy beer, growth in off-premise establishments and modern supermarkets and the introductionof new products into this segment such as Archa Beer and Chang Draught (produce by the Company),Leo, Esarn Beer and Thai Beer (produced by Boon Rawd Brewery Co.), and Cheers Beer (producedby Thai-Asia Pacific Brewery Plc.).Increasing preference for lower alcohol beer. Similar to other markets, Thailand isexperiencing a shift in consumers' preferences towards lower alcohol beer. Historically, Thaiconsumers, primarily men, have preferred the strong taste and alcohol content of normal economybeer but this trend is evolving as a new demographic group of younger consumers, including women,become first time beer drinkers. The trend towards lighter, beer with lower alcohol content, is gradualbut has recently led to the introduction of new brands, such as Federbräu, Archa Beer, Chang Light,Chang Draught, Leo and Singha Light, to capture this new segment of the market.Urbanization facilitating beer consumption. Thailand has a large rural economy but in recentyears a key trend has been the increasing urbanization of the Thai population to metropolitan areassuch as Bangkok. This process, through increased purchasing power, has caused a gradual shift inconsumers' preferences from low-priced white spirits to beer, which is perceived by Thai consumersas more upmarket.SpiritsLow-priced local spirits face increasing substitution to other products. The ongoing growthof economy beer has impacted the sales performance of local spirits, particularly white spirits. Theemergence of low-priced beer, has stimulated the interest of traditional consumers of low-pricedspirits, rural people with low income, who are changing their beverage preference from low-pricedspirits to economy beer.International players are targeting the middle ground between local brown spirits andimported premium spirits. As a result of growing consumer preference for quality brands at affordableprices (for off-premise consumption), international players are introducing products such as blendedScotch whisky to capture the increasing demand for relatively affordable products containing agedmalt.Changing lifestyles leading to growth in on-premise consumption. Changing lifestyles andincreasing purchasing power of Thai consumers are leading to growth in on-premise sales of importedspirits. Many urban consumers, particularly those between the ages of 20 and 35, socialize in pubs,restaurants and bars, and consequently drink more imported spirits. The main beneficiaries of thistrend are vodka, gin, white rum, tequila, admix whisky and standard Scotch whisky, which are oftenused as a base for mixed drinks and cocktails.Part 2 Page 67