In time, this led many drinkers to change from Charoen’s whisky to his beer. He didn’t care. It was like taking money out of one pocket and putting it in the opposite one. The primary result is that Chang came to dominate the beer market as Singha’s share fell like a bungee jumper. By the end of 1995, Chang acquired seven percent of the market as Singha retreated to eighty two. Chang’s slice of the pie jumped to fourteen percent in 1996, thirty one percent in 1997, thirty two percent the next year, and to more than sixty percent in 1999, sinking Singha’s “one nation, one beer” marketing slogan once and for all.
That was the year that Boon Rawd yelled foul to the newly formed Trade Competition Board, a part of the Commerce Ministry. “We lodge the complaint because we want to make the first case under the Competition Law, and we want it to be a case study on unfair trade practices which are widespread in Thailand,” said Santi Bhirombaskdi, the man whose family held a virtual monopoly on beer production and sales for more than sixty years and forbade its agents to buy Chang when it was introduced. The irony likely was not lost on Dr. Supachai Panichpakdi, then the former commerce minister (and later the chief of the World Trade Organization). In his ruling, Charoen and Chang won the day.
One anti-trust officer said it was obvious that the distiller had resorted to predatory pricing, an unfair practice where one company, usually a big one with deep pockets, sells its product at an unsustainable low price calculated to cause its competitors, especially smaller ones, to bleed red ink until they went out of business. So what Charoen did might have been unfair, but it wasn’t clear, the board ruled, that it was illegal according to existing statute.
Boon Rawd did what it could to pick up the pieces, introducing brands called Leo (named not for the lion, but the spotted leopard, another big cat never seen in Thailand) and Super Leo, and then Super Lion to replace Super Leo, subsequently phasing out Super Lion and reintroducing it as Thai Beer. It also launched Singha Gold (a light beer) and then in 2004, Singha 70 to mark its seventieth anniversary. It hired an ad agency to produce a series of TV commercials exposing Chang’s questionable marketing practices and then enlisted three Thai boxing legends to endorse the beer in another series of spots. (A reaction to Chang’s using Ad Carabao, Thailand’s most popular rock musician.) It sponsored an Emmy nominated Thai cooking show in the United States. It launched a blend of beer with tequila. Finally, it reduced Singha’s strong alcohol content and bitter “hoppy” taste.
As beer consumption increased in Thailand, Singha sales by unit count improved, but in 2001, Chang’s market share was at seventy five percent, and Singha and Leo each stood at eleven per cent.
That was the year that Chang delivered the unkindest cut and proposed a merger of the companies. It would be a “merger of equals,” said the oyster vendor’s son, with each firm owning fifty percent. Santi surprised no one when he said it was “impossible both from the heart and for business reasons.” Chang was in a stronger financial position and had the better distribution network, so who, Santi surely asked himself, would end up running the show? Besides, he said, the government probably would reject such a proposal as being too monopolistic. Instead, Santi announced he was seeking an alliance with a foreign brewer to help with his large debt load and lost market share and to improve the company’s export capability.
As the beer market continued to open up, more new local brands and international labels gained distribution and by 2004 the supermarket where I shopped had six local beers and a surprising twenty-two imports from ten countries (some of them locally produced under franchise): Tiger from Singapore; Victoria Bitter, Fosters, and Crown Lager from Australia (plus a beer-tequila mix called Mez); Budweiser and Miller from the United States; Corona from Mexico; Asahi from Japan; Heineken and Grolsch from the Netherlands; Strongbow and Chimay from Belgium (the latter brewed by Trappist monks); Menabrea from Italy; Guinness from Ireland; and Kloster, Weihenstephaner, Erdinger, Veltins, Furstenberb,Warsteiner, and Diebels from Germany.
By 2004, Charoenhad put his children in charge of the beer business as he diversified, acquiring the local offices of the John Hancock Life Insurance and Southeast Insurance, a service affiliate of Bangkok Bank, Berli Jucker (originally a Swiss company and now Thailand’s largest bottle maker), and NCC Management Company, which operated the Queen Sirikit National Convention Centre. He also owned the Hotel Plaza Athenée, the Imperial Queen’s Park Hotel and other hotels in the Imperial Group, a controlling stake in the Lao Brewery in Vientiane, and Dho-Spaak Communication, the holder of the World Cup broadcasting rights in Thailand.
Singha was hanging in there. Sales of Singha, Beer Thai, and a mid-priced brew called Mittweida introduced to compete with Heineken hadn’t much improved, but the Bahirombhakdi family survived Charoen’s assault on its control of the bottled water market and in 2004, one of the more visible heirs, a grandson of the founder, surfaced on an interesting quest. Chutinant Bhirombhakdi was perhaps best known as a keen sportsman, a promoter of the martial art tae kwon do and a handgun sharpshooter. In 2003, he also acted in a television series. The next year he enrolled in class in the National Defense College, an elite military school that gave business executives, civil servants, and social leaders a chance to return to academic life.
Participants had to write a thesis and Chutinant picked as his subject Thailand’s competition law. In an early draft, quoted in The Nation (Apr. 7, 2004), he wrote that “…Thailand has been on its way to amending, adapting and adopting international trade practices since the days of King Rama V…The Trade Competition Act of 1999 is the latest revision concerning domestic markets, which are now under international scrutiny. But since its inception, many feel that the Act has not had as big an impact as originally envisioned, lacking major substance.”
I’m sure he’s right. Surely he has a reason to think that.
As for me, I drink Chang. I can find it just about everywhere, it suits my tastes better than Singha, it still has the kick of a mule, and it’s cheaper than all the rest.
But, sorry to say, it ain’t a world-class beer.
Faking It
In the final months of 2001, a lot of Thais raised hell about an American scientist who was alleged to have sneaked some of Thailand’s delicious jasmine, or hom mali, rice back to the United States, where he planned to mess with its genes and patent it. Why you should get a patent on something Mother Nature provides, with or without genetic modification, I don’t fully comprehend, but the issue here is that many Thais were furious…as they were again in 2004 when it was learned that genetic tests on rice cultivated in and marketed by neighboring Cambodia was identical to that grown across the border in its Thai birthplace.
The fear of “stolen” rice is not the only fret. The government’s Intellectual Property Department’s knickers also were in a twist over complaints about the liberal use of the words phad Thai overseas to describe the traditional local noodle dish. No sooner was that out of the headlines—it was concluded that protection of fried noodles was a lost cause—then concerned citizens started worrying about guarding the name and model of the samlor, or tuk-tuk, the noisy little three-wheeled vehicles that dart in and out of traffic mainly in areas popular with tourists and shoppers.
Again, it seemed to be too late, as tuk-tuk trademarks had been taken out in several foreign countries. A British company that imported the vehicles, MMW Imports, already was modifying and selling them under the MMW Tuk Tuk brand. The company, which declined to reveal the identity of its Thai supplier, was upgrading the tuk-tuks to the standards required to run on European highways—no easy task, according to the firm’s boss— thereby creating, in effect, a new vehicle.
What made these stories about Thailand and charges of alleged theft interesting was the Thais’ hostile response to the idea that someone might be stealing from them. While at the same time, Thailand was one of the centers of international theft, a country where virtually everything was counterfeited and sold on the open marketplace.
; Walk down Sukhumvit Road, where I live, and you can buy clothing by Polo and Camel, Swiss army knives, Nike and Reebok sports shoes, and tee-shirts advertising the Hard Rock Cafe and popular English football clubs. There are at least fifty stores where Indian proprietors (who also own much of the real estate) sell knock-off designer suits, measured on the spot and slapped together with a second fitting a few hours later, delivery in less than a day—stitched by hundreds of poor citizens and immigrants (both legal and otherwise) sitting at rows of sewing machines in factories the length of football fields on the city’s industrial fringe. There’s even a store on Sukhumvit called Versaces; I suppose the owner thinks the “s” at the end of the name circumnavigates any smear of illegitimacy. Markets and street stalls and shops in fancy malls from Chiang Mai to Pattaya to Phuket offer more—Rolex watches, French perfumes, the newest movies, DVDs, video games, gold jewelry, Gucci purses, even, god help us, Viagra. Every item a fake.
“The Thais are not innovators,” a friend says. “They created one of the best cuisines in the world, taking a little of this and that from here and there—the chilis from Portuguese traders, the curries from India—and made it something unique. Beyond that, there isn’t much to brag about. That may sound unkind, but the truth is, what Thailand is good at is copying. With or without permission.”
To some, this means counterfeiting. Violating international intellectual property laws. Stealing. The simplest word is theft and the most popular word in the press is “piracy.”
An effort was exerted to halt this. Police arrested thousands of vendors a year and in 2003 shut down nineteen factory owners; photographs appeared regularly in the press showing phoney products being flattened by heavy equipment. (Leading many counterfeiters operating in malls to employ spotters at the mall entrances who send an alert by cell phone when the cops show up, causing thousands of counterfeit discs to disappear from open view.) When the United States threatened to delay Free Trade Area negotiations with Thailand if the Thai government failed to make progress on intellectual property issues, the prime minister said he had thirteen state agencies involved in the suppression of copyright violations. Thailand further offered US$25,000 to informants for compact disc copying machines and cops were promised more than five U.S. cents for every pirated CD seized. Even when a coalition of popular performers appealed to their fans to stop buying bogus CDs, because the forgers were making it impossible for them to earn a living, the effort was ineffectual.
The counterfeit trade remained so untouched, in fact, that local producers cut prices, between twenty and fifty percent for CDs and VCDs and the license holder for such cartoon characters as Snoopy, Popeye and Garfield re-priced their product to five percent above the fakes—giving consumers some insight as to how large the original profit margins had been and why so much bootlegging was going on in the first place. It was, both pirates and consumers agreed, as if a Southeast Asian sort of Robin Hood were stealing from the rich to give the poor.
This cuts to the core of the matter. When a copy of Microsoft Office for an individual user cost over 15,000 baht, and Windows, the basic operating system, was sold at almost 10,000 baht, and a copy of the photo-editing software Adobe Photoshop went for 30,000 baht, and the average Thai university graduate entering the civil service received a starting monthly salary of 6,400 baht, it should have been no great surprise to anyone when the copied software found a ready market.
Nowhere was this clearer than in one of the least known and most intriguing museums in Bangkok, in the offices of Tilleke &
Gibbons International Ltd., which, despite its farang name, is the oldest law firm in Thailand, owned and operated by Thais. The firm has what it calls an “intellectual property” team and here is displayed in some of the hallways the evidence from hundreds of cases, some 1,500 exhibits in all. The thing that struck me the first time I saw it was how diverse the items were. The purses and belts, the cosmetics, the clothing, the watches, the music, the stuff you see on the street I expected. But pharmaceuticals? (Oh, yes, I was assured; did I realize how much ersatz Viagra was sold each day in Bangkok?) Electric irons? Johnny Walker Black? Cigarettes? Laundry detergent? Automobile tires? Engine parts? Motor oil? Veterinary medicine?
Thailand is not alone, of course. Throughout Asia and in other parts of the “developing” world, counterfeit goods are as much a part of the marketplace as exotic fruits and vegetables and live catfish flopping in plastic tubs. According to annual studies by the industry trade group, Business Software Alliance, Vietnam and China lead the world with the highest level of pirated software—including CDs, videos, and games—at an astonishing ninety nine percent. That meant that for every legitimate disc or video for sale in those countries, ninety-nine fakes were on the market, and being sold at a fraction of the legal market price.
So good were the Vietnamese at counterfeiting, that in 2000, the Ministry of Culture and Information announced that local painters duplicated international masterpieces so believably, that from that time forward they had to make the copies three centimeters smaller or larger than the originals. And sign their work under the copied signatures of the original masters. At the time, a credible “Van Gogh” was going for about US$250.
Similarly in China, the porcelain market was doing so well, skilled potters were producing fake Ming, Qing and Song pieces that were fooling some of the experts.
Thailand was not far behind. There were in Bangkok and Ayutthaya sculptors so skilled they produced convincing copies of religious statuary, while others carved wooden figures and, after burying them in the ground and treating them with various chemicals, sold them as the real thing. Years before moving here, I once visited Thailand with a developer from Hawaii who wanted to purchase authentic artifacts for display in his fancy new hotels. Wary of being cheated, he hired a local antiquities scholar, who evaluated the items offered for sale. It wasn’t until he returned home that the developer learned his expert okayed bogus items in exchange for a kickback from the counterfeiters.
Most of the piracy is of cheaper items that are mass produced. My son is a computer graphics designer in the U.S. and when he first visited me in Bangkok, I took him to Pantip Plaza, the five-story mall on Petchburi Road devoted mainly to computers and other electronic devices, and software. Our first visit, he was stunned. For an hour or more, all I heard was, “Dad, I paid thirty dollars for that! I paid a hundred dollars for that!” And so on. Never pointing at anything that cost more than a few dollars. When Windows XP, the latest endeavor by Microsoft to separate consumers from their money, appeared in shops the end of 2001, costing almost as much as a PC, copies were flying off the Pantip shelves at two hundred baht (five dollars) apiece.
Even pornography is bootlegged in Thailand. One of the street stalls outside my bank on Silom Road openly sold XXX videos. (The bank moved, the stall remained.) This was just one of several operating in that neighborhood during the day, one of dozens offering the same product at night. The reproduction was sometimes poor—there were incomplete scenes (talk about coitus interruptus !), bad focus or color, etc.—but the $2.50 price was right, for a video that cost ten or more times that amount in the country of origin.
Counterfeiting, bootlegging, copying, call it whatever you want, it’s practically unavoidable, and so affordable it’s irresistible. I’m wearing fake Calvin Klein undershorts. Some of the Polo shirts in my wardrobe are fake. My last pair of slippers said Nike but it was a lie. (And they lasted only two months before falling apart, one of the risks of buying funny goods; there is a joke about the Rolex watch you buy in Bangkok is guaranteed to last as long as it takes to get to the airport on your way home.)
Don’t even ask me about my CDs. I’m guilty, guilty, guilty, along with what may be a majority of the urban population.
It’s a part of living in Thailand. In the slums, nearly everyone wears designer clothing and you know where it came from. (Ironically, Nike donates a lot of the Real Thing to the Bangkok poor.) The rich keep the legitimate
stores going—to be caught wearing a Gucci shirt with imperfect button alignment would be to lose face, after all—but it is that Thai upper class, along with some of the wealthier tourists, who provide a majority of the customers. We poorer folks go for the ersatz goods every time, even if one leg in a pair of “Wrangler” jeans is shorter than the other.
So ingrained is the consumption of fraudulent goods in Thailand that the Bangkok Post published a story by two of its reporters (in June 2001) that told readers what to look for in determining not a real thing from a fake, but how to spot the most convincing counterfeits.
“Selecting the best fake requires a keen eye,” the reporters said.
Bi-Racial Cool
It wasn’t so long ago when inter-racial sex was scorned in Southeast Asia and children from such pairings were ostracized. No more. Today, offspring with genes from both east and west are frequently lionized, sometimes winning a spot at the top of their chosen fields, becoming role models as well as celebrities. It is no surprise that this is being exploited commercially, but what isn’t admitted so freely is: why?
Until fairly recently, Southeast Asia had an unpleasant history of racial bias. Singapore, Malaysia, Indonesia, Vietnam, Cambodia, Thailand...every nation in the region experienced horrific conflict between various ethnic groups. In some areas, prejudice persists today.
Illegitimate children left behind following war were spurned almost everywhere, notably in Vietnam, Thailand, Laos and the Philippines—wherever the U.S. sent its military. As colonies became nations, mixed-race children were reminders of a Western-dominated past. The most that many could expect was a mean life on the street. So grim was the situation in Vietnam, any mixed-blood youngster who could in any way establish American parentage was given a pass to the United States in order to escape the prejudice; sometimes little more than a western nose or black skin seemed enough to qualify for America’s Orderly Departure Program. In Thailand, children of racially mixed parents could not become citizens until the early 1990s.
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