Thailand’s Moonshiners Going Legit

Makers of homemade Thai rice whiskey once plied their craft in jungle hide-outs and farmyard shacks, concealed from the gaze of police officers threatening arrest and the seizure of their makeshift stills.

But what was once a furtive -- and criminal -- enterprise has been legalized and even touted by the government as a source of revenue that could help lift Thailand from its economic doldrums and enrich poor villagers.

Appealing to the entrepreneurial instincts of rural moonshine peddlers, the government of Prime Minister Thaksin Shinawatra legitimized the trade a year ago, urging fermented fruit and rice wine producers to apply for licenses.

Among them was Sawai Nuengsamphan, 42, a former welder and gas station attendant whose family had produced the sweet alcoholic tipple illegally for decades. For weddings, funerals and ordinations, the family supplied the spirits.

Over the years, Sawai’s grandfather was arrested several times for distilling “sato,” the sweetish and pungent brew that is popular in rural Thailand.

After the laws were relaxed in November 2001, Sawai envisioned his family’s cottage industry becoming a runaway large-scale business with clientele spanning the globe.

“I have a dream that foreigners will drink this,” he said. “The first place is Japan because the taste is like sake. Also in Singapore and Taiwan because there are Thai workers there.”

With a $45,700 loan, he founded Mahamit (Great Friend) Thai Wine, which produced 120 bottles a day when it opened in April and now turns out about 6,000 bottles in the tin-roof distillery in Rayong province, 90 miles south of Bangkok.

“We are pioneers, the first to sell legally in Rayong province,” he said, removing the lid from a plastic tub of fermented rice and herb mash, sniffing its alcoholic aroma.

Nearby, workers balanced aluminum vats on a dozen gas burners to boil rice, the key ingredient in sato. Mixed with water and sugar and flavored with ginger and other herbs, the rice ferments for 20 days to become alcoholic.

Filled in sterilized beer bottles with hand-affixed labels, Sawai’s hooch sells briskly across Thailand at 60 cents a bottle, particularly in the northeast, where drinking such firewater is an honored pastime.

“The first people who tried my sato said I was crazy because villagers can make this and why would they buy it from me?” he said. “I told them everybody can make soup, so why do people buy it from the market?”

While legalizing the industry, the government is also imposing a 25% to 30% tax on each bottle. Still, Sawai’s profits have been rich enough to pay for a new Toyota pick-up truck and construction work on a second factory.

The government hopes that while some people continue to make hooch illegally to avoid taxes, many like Sawai will see the benefit of running a licensed business that will allow them to market their product.

The ban on local liquor production was meant to protect a monopoly on Thailand’s whiskey market held by Sura Maharas, for years the sole holder of a government concession to produce cheap rice whiskey.

Officials say the newly licensed producers are aiming for a different market -- the poorer rural residents and, eventually, overseas consumers.

“So far we’ve made about 68 million baht [$1.6 million], from January until now” in taxes and license fees, said Sujarit Patchimnun, the head of the Interior Ministry’s community development department. “The main thing is to help the economy, to make money.”

Locally produced rice whiskey must contain less than 15% alcohol, according to the Ministry of Finance. Licensed whiskey makers are required to have their products examined regularly by the excise department.

Licenses have been given to about 450 producers, whom the government describes as “farm cooperatives,” meaning they are certified village residents who have created a cottage industry and generated employment.

About 500 more individual hooch makers remain unlicensed and will continue to be targeted by authorities unless they form cooperatives. Until then, if convicted they face a fine of up to $110 for each infraction and six months in jail.