for joining the Thai Beverage First Half 2024 results call. All participants have been placed in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. I will now hand over the call to the presenters, Ms. Namfon Aungsutornrungsi, ThaiBev's Head of Investor Relations, and the members of ThaiBev's Senior Management Team. Thank you.
Good evening, ladies and gentlemen. Welcome to Thai Beverage First Half 2024, ended the 31st of March, 2024, Financial Results Conference Call. I am Namfon Aungsutornrungsi, Head of Investor Relations. For the call tonight, I will start with a summary of our first half results, then we will open the line for Q&A with our management team here. For the summary of the first half results, total sales revenue of the company for the first six months was THB 147,742 million, a slight decrease of 0.4% when compared to the same period last year. This was due to a decrease in sales revenue of the beer business. The net profit was THB 16,917 million, a decrease of 4.9% compared to the same period last year.
This was due to a decrease in net profit of the food business and associated companies, partly offset by an increase in net profit of the spirits, beer, and non-alcoholic beverages business. ThaiBev's Board of Directors agreed to propose an interim dividend payment of THB 3,769 million or 0.15 THB per share, the same as last year. For the highlight of our first half results, in the first half of 2024, the spirits business generated sales revenue of THB 65,497 million, a 0.5% year-on-year increase due to price adjustment and the portfolio mix. In light of the effective management and operational and administrative expenses, the business saw an improvement in net profit margin while maintaining a steady growth in net profit of 1.1% year-on-year, reaching the net profit of THB 12,975 million.
The beer business recorded sales revenue amounting to THB 62,523 million in the first half of 2024, a decrease of 3.3% compared to the previous financial year. This was mainly due to a 5.7% year-on-year decline in total sales volume. However, net profit increased by a satisfactory 7.1% to THB 2,713 million due to a decrease in key raw material packaging costs coupled with better production efficiency. The non-alcoholic beverage business recorded a 5.2% rise in sales revenue to THB 9,929 million in the first half. Sales revenue was lifted by a 6.3% increase in total sales volume across all categories, comprising drinking water, ready-to-drink tea, and carbonated soft drinks. Despite increased costs from brand investment and marketing activities, the business delivered a remarkable 24.6% growth in the net profit to THB 354 million due to lower costs of packaging and improved production efficiency.
In the first half 2024, the food business registered THB 9,856 million in sales revenue, a 5.2% increase compared to the same period last year. The increase was driven by the opening of the new stores to expand customer reach. Our production efficiency improved. The increased cost of raw materials as well as the higher operational and administrative expenses, especially in brand investment to support the sales growth, weighed down on net profit, which fell to THB 33 million. So this is the summary of our first half 2024 financial results. Now we open the call to any questions on our results. Operator, please help open the line for Q&A.
Thank you. We will now begin the question-and-answer session. Participants with questions to pose, please press star 11 on your telephone keypad, and you will be placed in the queue. To cancel the queue, please press star 11 again. So that was star 11 on your telephone keypad to register for any questions. And our first question comes from the line of Pimada Dharmono from UBS. One moment, please, while we open your line for your question. Please go ahead. Your line is open.
Hi. Good evening, management, and thank you for the opportunity to ask a question. I just have one quick question, and I'll go back to the queue. In your prior disclosure to the SGX on August 11, 2022, you mentioned that ThaiBev remains confident that BeerCo, as one of the leading beer players in Southeast Asia and its growth potential, offers a distinct and compelling growth strategy. And ThaiBev will continue to monitor market conditions, evaluate, and explore opportunities to maximize shareholders' value, including where appropriate, reviewing the proposed spinoff listing at an appropriate time. Previously as well, at the annual information meeting with analysts, Khun Thapana has said that in any sort of collaboration with international brewers, the guiding principle is that ThaiBev maintains a majority control of BeerCo.
Recently, of course, Bud APAC has said in its press release that it is open for an M&A opportunity in Southeast Asia. So I'm not going to ask any questions about Bud APAC, but my question to ThaiBev management is that has that guiding principle remained the same, i.e., majority control in any potential collaboration remains the guiding principle, or has that changed? Thank you.
It all remained the same. Remained the same. Yes.
Thank you. Thank you.
Thank you. And one moment for our next question, please. And our next question comes from the line of Divya Gangahar from Morgan Stanley. Please go ahead. Your line is open for your question.
Thank you very much. I had two questions. My first question was on the spirits business. I just wanted to understand the reasons for the 1% decline in spirits. And if you can comment, I guess the domestic volume decline would be probably higher than that given that the international spirits business did well. Could you talk about the difference between white spirits and brown spirits, and where are you seeing pressure? And what would really need to happen for spirits volume growth to go back to positive, or if you're already seeing that in the current quarter? And my second question is on the domestic beer business. Could you update us on where market shares are now given the fact that we've had mid- to high single-digit volume growth? Has this been above industry?
Do you expect this momentum for mid to high single-digit volume growth in Thailand beer to continue? Thank you.
Hi, Divya. The spirits market in Thailand, we have some slight decline from the brown spirits, I think. We had a good recovery last year coming from a bit lower base coming out of COVID. But then that recovery from the brown spirits consumption last year was a bit fizzled out. This year, the economy itself doesn't look too good. So the brown spirits consumption, what we've seen, has started to experience a bit of a challenge. White spirits remained about the same for this period. We're not losing any white spirits sale. So in terms of that in itself, yes, international market is still performing well with higher volumes and profits. So in combination, it allows us to deliver higher profits as well because in Thailand, we do a lot of price control, sorry, cost control, to maintain our profitabilities. Okay.
Okay. Hi. Good evening, Khun Divya. This is Songwit from Thailand. So according to your questions about the beer situation domestically, I mean, so I assume that you asked a question for Thailand. So just overall, I think from the number that we have seen for the first quarter, that probably the total market in Thailand is quite a little bit slow, I mean, from October to December. However, starting from January to March or even until now, April and May, we see the positive momentum for the overall of the beer market. There are several factors. Number one, we have observed the number of the tourists that are increasing starting from the early of February, starting mainly from the Lunar New Year, that we observe more tourists coming to Thailand, I mean, Chinese, Malaysian, Russian, and that number one.
And second one, we also see the development of the—I mean, due to the—how to say?—hotter temperature, the increase in the temperature in Thailand starting in February and March. So we see that there is more of the demand of the beverage for the beer business in Thailand. And the last one, we also see for the momentum of the atmosphere for the people in Thailand that are due to more of the events in March and April. So I think for the Q2, the overall beer market increased compared to last year. And then if you ask about what is our market share for the Chang beer and also for the total ThaiBev beer, we see that we are ahead of the competitors. So we gain our market share in Q2, and we still see the positive momentum in the Q3 as well.
Hope that answers all of your questions.
Yes. Thank you. I just have one clarification regarding spirits. Could you just clarify that you said that white spirits volume is actually stable, so where we are seeing the decline is actually on the brown spirits? And if you can explain what the reasons for that is and what needs to happen to see that reverse.
Okay. Divya, yes, again. Yes, that white spirits in these first 6 months compared to the same six-month period will have a stable volume, slight increase, actually. The decline, it's mid-single-digit for brown spirits because last year, we had a good run on brown spirits, so it's kind of fizzled out a bit, back to the base. So again, the reason we believe is just people are not going out as much as just the economy is not allowing people to spend more money. That is the reason what we believe in. So what would have to take place? I think looking forward, we have a lot more tourist arrival into Thailand. Farm prices are good. So I think we're expecting a better economy.
Maybe looking out in terms of the government plan in terms of injecting more liquidity or more cash into the hands of consumers, that probably will make a change in the next outlook for the next 12 months if it really happens. Yeah.
Got it. Thank you very much.
Thank you. And one moment, please, for our next question. And our next question comes from the line of Llelleythan Tan from UOB Kay Hian. Please go ahead. Your line is now open for your question.
Okay. Hi, management. So I just have two questions. So my question is more related to raw material for both spirits and the beer segment. So just looking at the second quarter performance, I see that the cost of goods sold as a percentage of sales revenue has fallen. So I just want to understand, is it because for the spirits, is it because of lower molasses costs, or is it because of cost efficiencies elsewhere? So then moving forward, do you—I remember that the last meeting I remember that the conversion yield of molasses was a bit lower. So do you see a higher cost, a higher raw material cost moving forward?
Also for the beer segment, the same question, do you see that seeing that the cost of goods sold has dropped slightly, so do you see moving forward that the raw material cost will also drop? Yeah. My second question, just a housekeeping question, could you share a bit of color on the contributions from associates? So I see there's like a 70% drop year-on-year. So could you just clarify on what happened there? And could you just share more color on that? I only have these two questions. Thank you.
Hi, Leighton. This is Lester here. Let me cover the second question about the associates. That's mainly from Vietnam. We had two big associates. One of them is Crown Saigon. It's a packaging company which we have a share in. They did turn in a larger loss compared to last year because of smaller orders. Then the second one is the Binh Tay Beer Group. They also turned in bigger losses compared to last year. So it's these two associates that mainly contributed to the numbers. Moving forward, we are working with them. In fact, I just had a call with Crown. We're looking to have better results in the forthcoming quarters moving forward.
ครับ. Good evening, Khun Tan Jilong. Regarding to your questions about the trending of the COGS for the beer business, so for the beer in Thailand, as you've seen for the results, the COGS to the % of sales revenue, I mean, have the positive momentum to us, meaning decreasing for the Q2. Mainly, I think that mainly from the malt price that we have a very good team that manage the cost of the malt price and also for the packaging, both of the bottle and for the can. Thank you.
Okay. So on the spirits as a group, well, majority of contributions are coming from Thailand, and the reason the cost of goods inched down a bit as a percentage of sales, it's just some of the product mix change. In terms of cost structure, it doesn't actually change by that much. We used a bit more used bottles in the second quarter than the first, but there's not a significant difference. Input molasses costs for this season start to pick up a bit more than previous season as well because of the weather and the output of the sugarcane production's output in Thailand has reduced due to the weather as well. But we are expecting better output next year, so that should control our molasses costs going forward.
Okay. Thank you so much. I'll jump back to queue. Thank you.
Yeah. I think you're asking about the associate profit, the associate profit that reduced because there's only two major associate companies when we report, and two major ones, both of them are listed. One is Fraser and Neave, Limited, another one is Frasers Property Limited. You can check their earnings release separately because they're both listed on SGX.
Okay. I do.
Thank you. One moment for our next question, please. In the meantime, as a reminder, if you would like to ask an audio question, please press star 11 on your telephone keypad. Once again, that is star 11 on your telephone keypad if you would like to ask any questions. Our next question comes from the line of Titi Nopakhun from Kiatnakin Phatra Securities. Please go ahead. Your line is open for your question.
All right. Thank you. Can you hear me?
Yes, we can hear you, Khun.
Hello? Yes, I have two questions. Number 1, Khun Pop, you did say that the international spirits is doing well. Can you confirm that the escalating situation in Myanmar so far has not had any negative impact on spirits production and spirits sales in Myanmar, and do you have any concern about the political situation? Number 2, it's on domestic beer. Can you give us some update or some color of the market share or performance of the new entrants from about the Tawandang beer? It would be very helpful. Thank you. And then on the third question, it's on balance sheet. I noticed that you actually have positive free cash flow every quarter, but then the total amount of debt seemed to stay around THB 200 billion for the past several quarters. What is your policy on debt reduction? Thank you. Just three questions.
Khun Titi, yes. It's okay. So on Myanmar, well, our major subsidiary Grand Royals is the number one whisky company in Myanmar. We continue to report growth in both volumes and revenue. We have a lot of price increase in the market because of cost structure that we're pushing through due to depreciating currency. But on a quarter-to-quarter or six-month-to-six-month, we are reporting a higher margin as well because our price increase is exceeding the level of cost structure that we're pushing through. So I think from the reporting local currency, we actually do have expanding margin and higher volumes. So it has been a very positive business in the past two years. And in terms of the situation for in terms of situations of the political situation in Myanmar, I wouldn't probably want we shouldn't comment on the political side of things.
But what challenges us as a business is, as always is the case, that the country actually has less foreign currency, so there's a lot more longer queue in terms of to secure foreign currency to buy the input raw material. So it takes longer in terms of weeks. We're not talking about it should be maybe 2 weeks. It could have been 6-8 weeks to work out the operational to bring in the input raw material. So those have actually been challenging. And also securing foreign currency to pay for those, those have been challenging as well. But we have a very good team, very good management, so we have overcome that very well and continue to report good profitability and improving. Okay. That's from the spirits business. Back.
Thank you.
Sawasdee na krub, Khun Titi. Phom Songwit na krub. So regarding to your questions in number two, that's talking about the market share in Thailand. So I was just referring to A.C. Nielsen and IRI. So point number one that I just want to mention is our brand, meaning a Chang beer brand. We have a positive number. And if we compare with the other competitors, I think that now the market share is at the narrowest market share gap ever. So that's for the brand. And if we're talking about the company, meaning a Thai Bev and the other players, I think we also see the lower gap as well between the companies. And then the last one, you asked about the new players coming in October last year.
I think I just want to say that the first point is we had a new player so that it makes expansion for the total beer business in Thailand. That is the growth of the market. And then the second one, if you ask what is their status, I just would like you to observe the sales share in the big hypermarket in December for the newcomer, for the newcomer. Yeah. Okay. I think for the A.C. Nielsen, they already peaked the market share in December about 1.5% market share. And right now, they slightly, I mean, go down to about 1% for the recent reading.
Oh. Oh. That's very helpful. Thank you.
On the third question is on the balance sheet. Yes, we reported slightly higher total debt, total interest-bearing debt. There's some timing differences as well. One is that we actually have a higher inventory closing the sixth month due to coming in for the selling season. So that number looking close to about THB 5 billion. And we also have some slight negative carry coming for that month of March because we have a bond due in April. So we carry a bit of cash and debt coming into that quarter. So that's kind of resolving it after April, debt repayment. Okay. As for the policy, yeah, we do have a policy to continue to reduce our debt as per our cash flow allow. That's continued to be the case.
We do manage our debt very carefully and reduce our repayment risk and manage to extend the maturity of debt, including looking at fixed and floating interest rate all the time. So that's something that we pay great attention to, right?
Right. Okay. Thank you very much, Khun.
Thank you. One moment, please, for our next question. Our next question comes from the line of Tan Xuan from Goldman Sachs. Please go ahead. Your line is now open for your question.
Hi. Good afternoon. Sorry. Good evening. Can you talk a bit more about the competitive landscape within Thailand beer, especially given that you have gained market share? What are the competitors doing, and any plans to increase SG&A?
Kuan, was I here? I think the situation in Thailand, beer business I mean, beer business in Thailand, competition is still fierce. I think in terms of performance, I think we did well. The share is growing. The newcomer didn't make any dent because overall market share, I mean, recently, is only 1.2%. Their objective is to get 10%, but it's so far away from the objective. In terms of SG&A, we hope to be able to maintain in terms of percentage sales at this level because it's quite high already. Okay. We hope that actually, the newcomer, they didn't spend that much of money because they have a bit of a problem on distribution. In terms of distribution level, they are only up to about 35% max. While our main competitors is up to the 95%-100%.
So they are not spending money. Of course, at the moment, they're doing some price cut. That's mainly because the beer is now dated. I mean, the age of the beer is roughly more than about 4-5 months. So they need to do something to get rid of the beer rather than take it back. But no one, I think us and our big competitors, did not follow the price war or anything. So we don't expect to have that kind of price war in the next 2 or 3 quarters. Okay. Thank you.
Got it. Thank you. That's very clear. Second question is still on beer but longer term and both on Thailand and Vietnam, right? How do you think the demand is for international premium brand? And do you actually think Thai Bev will benefit with the international premium brand within the portfolio through potential collaboration?
Hi, Xuan. This is Lester here talking about Vietnam. I think in the long term, the beer picture for the country looks very good. Obviously, there are three big things that bode well for the market. First of all, obviously, it's a very young market. So the young demographic usually points to a better future for beer volumes. Secondly, the market is booming economically. So that will help with income. And then thirdly, obviously, is the very strong beer culture in the country. I think of the entire alcoholic market, beer takes up more than 90% of the total alcoholic market. So when you put these three things together, long-term-wise, the beer future looks very bright.
And obviously, if you're looking at an international premium having a role in this growth in this market, yes, it will be there, especially when you see the economy picking up or the economy growing. And that's where I think we will work at it in many different ways. We are always expanding our portfolio, moving up the price ladder, the margin ladder, to take advantage of that internally. And if there's any partnerships in the future, I think I talked about this at the SABECO call last week, that it will be done at a group level. It won't be done at a country level. And this will be decided by BeerCo regionally.
Yes. Tan, I just want to give a color on the Thai beer market. At this stage of economy, I think the growing beer sector is economy. Our friend premium beer has a lot of problems. Right now, our Chang Cold Brew is outselling the international sort of beer already, the premium beer. So I believe that currently, our portfolio is enough to really sustain and fight the market for the next year or two. Thank you.
Thank you. That's all from me.
Thank you. And once again, as a reminder, if you would like to ask a question, it's star 11 on your telephone keypad to register. Once again, that is star 11 on your telephone keypad if you would like to register for any questions. And one moment for our next question, please. And our next question comes from the line of Paul Chew from Phillip Securities. Please go ahead. Your line is now open.
Thanks so much for the presentation. Just three questions for me. They're all on spirits anyway. The first one is on spirits. On your slide, you mentioned the surprise adjustment. Could you maybe elaborate how much will the surprise increase or adjustment? The second thing is that you mentioned earlier the demand is going to be a bit hinged on the government or there's a fiscal boost. So I just wondering, are you confident in that? And if you are, do you have to prepare for any boost in demand? I guess a speculative question. My last question is just for spirits where you already have a dominant market share, is there room to even reduce your SG&A from the current 10%-11%? Thanks so much for taking my question.
Hi. On price increase, let me elaborate it. Price increase takes place actually across all our products. In Thailand, for this period, we have a very small price increase on brown spirits small bottle, which is representing maybe about one-third to 40% of our brown spirits business because we haven't increased the price for the brown spirits small bottle for 4-5 years. So it's been at this price for a long time. We have price increase also in Myanmar, like mentioned earlier, that because of cost push, we continue to have to adjust our price upward. And internationally, our branded malt whiskey also has some price structure to be increased as well. So that's just to explain. Coming to boosting demand or any preparations, I think the certainty of when the government, the time the government will boost the economy, is actually not clear.
They kept saying end of the calendar year this year. So I think we're expecting that. So if it comes, would there be any preparation? Actually, no, not much because as long as you put money in the hand of consumer, it will actually increase the disposable income and allow the consumer to spend. So I think that's something that we don't think there will be any changes in terms of the way we work. In Thailand, room for SG&A? Actually, our SG&A is very tight in Thailand already. So I think any more room? The answer is probably not a lot. I mean, we continue to improve efficiency. So that's reducing slowly. But we will continue to have projects that improve efficiency year on year. But I don't think any significant change to our structure of SG&A would happen for the domestic Thailand.
Yeah. Thanks so much. Just one quick follow-up. The price increase that you made on the brown spirits small bottle, did you see any impact on the volumes? And also, can you maybe share when did it occur? And I guess so that we know that this thing can, I guess, flow the coming quarters if possible.
Well, I think brown spirits, in general, have taken a bit of a decline, a small decline, like mentioned. So it's not having to do with the price increase per se. The price increase needs to be dealt with because I think no consumer product can just stay on the same price forever. So I think we didn't increase the price of our small bottle brown spirits for, like I mentioned, 4-5 years. So it's been quite a long time. So we just pushed through the price increase as well.
Okay. Yeah. Got it. Yeah. Thanks so much.
Thank you. And once again, if you would like to ask an audio question, please press star one one on your telephone keypad to register for a question. That was STAR11 on your telephone keypad if you would like to ask a question. And our next question comes from the line of Permada Dharmono from UBS. Please go ahead. Your line is open.
Hi, management. Thanks again for the opportunity. I'm not sure who to direct this question to. Probably Khun Nongnuch if she's around. But in February, of course, Devyani International Limited, which is an Indian firm and largest franchisee for Yum! Brands in India, entered into Thailand to become one of the three KFC franchisees there. Since their entrance, have you seen any major changes to the competitive intensity of KFC? And tied to that, what does Thai Bev think about Yum! Brands' motive of having three franchisees in Thailand? Why do they do that? Because that's not typical of their modus operandi in other markets.
Hi. Thank you. This is Nongnuch. Yeah. On the RD, I think the deal they announced that the Indian will take care. But I think they have not yet finalized. So they are working on. Okay. So that is what I can say now. For Yum, it's actually the three franchisees is a Yum Thailand policy that has been aligned since the beginning to balance the portfolio. So they will remain no matter what. It will be three franchisees operating in Thailand. Thank you.
Can I ask a follow-up to that? How would Thai Bev characterize its balance sheet capacity currently? Is it ready for sizable acquisitions again or not really? Because most recent acquisitions like the Cardrona out of New Zealand and so forth are quite small. How would you characterize your balance sheet strength today and capacity for potential M&A as an acquirer?
So Permada, yeah, I think you could see that in the past 6 months or 12 months, we have done those small M&A. And the small acquisition takes place because it fit well within our parameters of what we want to do to invest over the long term. Any significant major acquisitions will probably need to be viewed seriously. Well, there is that capacity. But we just don't want to spend on things that are not strategic. But there are opportunities like that that come along that easily. So we do, from time to time, continue to evaluate our potential acquisitions. Yeah. So I think that the answer is a small one actually took place. And the bigger one, it's only if it aligns well and fits well with our strategy.
Thank you. Thank you, Khun Thapana Sirivadhanabhakdi. Third question is in relation to Thai Bev 's agreement or franchise license with Yum, does it allow or does that agreement allow Thai Bev or restaurant? I think the entity is QSR of Asia. Does it allow QSR of Asia to operate KFCs outside of Thailand?
Currently, territory is only Thailand right now. Thank you.
Thank you so much for the clarification. Those are all my questions. Thanks again.
Thank you. One moment, please, while we take our next question. Our next question comes from the line of Andy Sim from DBS. Please go ahead. Your line is open.
Hello. Hi. Thank you for taking my question. I have two questions. Sorry. I joined a bit. So this may be asked. The first question is actually with respect to beer raw materials. In your slides, you mentioned the benefit of lower raw materials. Can we expect this to continue going forward and actually further decline? And put this against also Vietnam is actually, I think, just earlier this week on the SABECO side, I mentioned that this will only see the lower raw materials will only be seen actually maybe in FY25. Does it apply to Thailand as well? Or how do we see the two? This is actually my first question. My second question is with respect also to beer. Maybe on a side question, it's actually in this current weather condition, are you seeing actually higher consumption in terms of beer, especially in Thailand?
Already seen actually in second quarter or this actually there's actually a further boost actually in the month post second quarter. Thank you.
Talking about the beer malt, I think you did ask a very big question. Actually, now the market price is EUR 730 a ton. But we are so lucky in the way that we have locked for the full year and until the first quarter of next year at EUR 500 something only. We are so lucky in the way so that we have locked for long term. But you asked for the future. Now, you may not know that all the maltsters in the world are gathered in Bangkok to have a symposium. I did welcome them. And I did talk to them. They are very pessimistic about the war in Europe. They are very, very pessimistic about the freight costs that are going to rise.
And they are very pessimistic about Ukraine. That is the breadbasket of the world. So I cannot. I have no crystal ball. But I can tell you that every day before I take breakfast, I look into this commodity because it's so niche. We have to take care of it, Andy. And we have been always lucky. That's why Khun Songwit already presented that why we keep our cost of goods so down. I think I answered your question.
Right. Yeah. Thank you. So just to confirm, I think you're saying that the raw materials are actually hedged until early next year?
I have one thing to go further to you that please, you may know that now China is having the overproduction or overcapacity as well. So this is the thing that also helps the beer business as to push the aluminum can down.
We can use the aluminum can from China, I mean, to what we call if anything happens, China has more than enough aluminum can to cover the earth for Thailand or for Vietnam. Don't worry. I think the aluminum can cost will be okay because China is doing a great job.
Okay. Thank you. Thanks.
Andy. Hi. Lester here. Just to talk a little bit about Vietnam and our raw materials, I think you also know that we are hedged on a different pricing than Thailand. So we are hedged till the latter part of this year. So all the lower prices, we enjoy probably next financial year before it, we enjoy the lower prices. But something to talk about is that we are working closer together with Thai Bev to talk about group purchasing. And this is where the 2025 numbers, it's because of this group procurement synergies that we're starting to enjoy. So if you talk about moving forward, this partnership or this collaboration together with Thai Bev , I think we'll see positive results in the years moving forward.
Okay. Got it. Thanks, Lester. Sorry. Just a follow-up on the second question in terms of the higher consumption or weather, any impact?
Yes. That's Songwit from Thailand. Yes. The high-term manager that gives a very positive impact to the overall beer consumption in Thailand.
Is this already seen in April or this, sorry, in second quarter or?
We already observe in the.
We expect more to come.
Yes. We already observe starting from the second quarter and continue the momentum in the third quarter.
Thank you very much, Khun Songwit.
Thank you. And one moment, please, for our next question. And our next question comes from the line of Selviana Aripin from HSBC. Your line is now open. Please go ahead.
Sure. Thank you very much, management, for the presentation. I wanted to, I guess, understand your thought process around whether you see opportunities for price raising in beer in Thailand specifically. I mean, there are, I guess, a confluence of factors here, right? Because factors like weather appears to be in your favor. But I guess competition will probably try to keep you guys on your toes. I wanted to understand how do you guys think about it? How do you see the opportunities for price raising going ahead in the next, I guess, six months to 12 months? Thank you.
Okay. Hi. I think for Thailand, if I just check the historical, in the last two years, we already increased the price three times. And with this situation, meaning the lower of the COGS, we don't have any plan to increase the price for the near future.
Got it. Thank you.
Thank you. One moment for our next question, please. Our next question comes from Pimada Dharmono from UBS. Please go ahead. Your line is open.
Sorry. It's me again. I keep coming back. In developed markets, we're seeing trends of millennials and millennials or Gen Z drinking less alcohol than the older generations. Has Thai Be done any studies in Thailand and/or Vietnam if this is happening in Thailand and Vietnam? And if it's not happening, then great for Thai Bev' s business, right? But if this trend does go to Thailand at some point, do you have any product development strategy to mitigate against such trends?
Well, yeah, Pimada, this is Prapakon . I think generally, the trend of drinking less alcohol is actually it is a global trend. In the Western market, you see more of a big European market, big European companies start to have a well, for the spirit companies, start to call segment like no and low, right? But for us, actually, when you look at Thai Bev , we actually have a full range of alcohol from beer, which to us is considered low alcohol because we do actually sell spirit at 40 degrees as well. So actually, from the alcohol world, we actually see us in our core market covering all fronts. Beer can go low alcohol beer do exist in the market.
We have not actually, if you talk about people drinking less alcohol, less alcohol, but we actually haven't seen a growth in low alcohol beers in both Thailand and Vietnam in any significant way. So showing the trend that people actually do a mainstream beer at 5% probably be where the consumer in this part of the world would drink. So would there be a drinking less spirit and into beer? That could be. That depends on the trend going into the future. So I think from the spirit side, we also do have in pipeline the NPD that's selling spirit that are in a lower alcohol front. So I think that's something it continues to develop over time. But to answer it, it's that the speed of that trend in our main core market actually much slower than the Western market.
Many thanks for those insights. Really, really helpful. But you haven't mentioned anything about the non-alcoholic beverage side in terms of product development. Anything there that is meaningful? Are you going to try to boost basically things like est or Sermsuk's products?
I think Pimada, this is Sithic hai. I think we are aware of the health-conscious here. And then, for example, at Oishi, we continue to launch 0% sugars and all that. Yeah. We do have NPD in the pipeline. And we observe the trend closely. And then to make sure that we're not really sort of miss the train, yes, we do have NPD in the pocket. Yes.
That's great. Thank you, Khun Chai. Thank you again for the clarifications.
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