The new measure, expected to come into effect on 24 October, will also completely ban alcohol brand POS displays at convenience stores, shopping malls, restaurants and public places.
In addition to prohibiting sales promotions or give-aways, the Ministry is also considering curbing the use of brand logos on merchandise such as umbrellas and chairs.
The blanket ban comes when many in the industry were hoping the country's new regime would relax the alcohol advertising restrictions implemented by the previous Government.
"We have seen it in the past, in the days of prohibition in the US and so on, where a complete ban does not reduce consumption," said Mahesh Madhavan, managing director, Bacardi Thailand. "The existing law that allows alcohol advertising on TV after 10pm has already had an impact on the marketing of spirit brands. Going a step further and banning it completely isn't really addressing the grassroots problem of the misuse of alcohol among a certain set of consumers."
One of the key fears among marketers is that the ban will result in an aggressive price war, leading to monopolies by larger brands and difficulties for new products and brands to enter the industry. TV is pegged to be the biggest loser in terms of advertising revenues. "Budgets will shift away from the advertising industry," said Rati Panthawi, management partner, Ogilvy & Mather. "TV stations will see big cuts in sponsorship and airtime purchases."
Last year, the six local channels earned a total of 1.7 billion baht (US$45.4 million) in revenue from advertisements of alcoholic drinks, which accounted for 65 per cent of the total adspend by alcoholic beverages. The ban is expected to result in the loss of 2.5 billion baht in total alcohol advertising revenue, according to Ministry data.
"The ban on below-the-line activities, too, will have far-reaching economic consequences, hurting all inter-related industries such as advertising, media, gift suppliers and POS," said Mahesh. "And we will see some of these companies retrench people, which again will have a spin on their incomes."
