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Asia? And how many hops in a top drop. The favoured ingredient in | :00:00. | :00:12. | |
craft beer. Hello and welcome to Asia Business Report. The decision | :00:13. | :00:18. | |
in Thailand to approve a new military backed constitution paves | :00:19. | :00:21. | |
the way for a general election next year. The ruling junta says it is a | :00:22. | :00:31. | |
step towards a fully functioning democracy, while critics say it | :00:32. | :00:35. | |
further in trenches their rule and say it could result in more not less | :00:36. | :00:39. | |
political turmoil. One analyst gave us his take on what it could mean | :00:40. | :00:44. | |
for South East Asia's second largest economy. In the near term it will be | :00:45. | :00:50. | |
positive. The current military government's investment plans will | :00:51. | :00:58. | |
continue. Investors on the domestic front as well, expectations of | :00:59. | :01:01. | |
democratic elections will come through sooner rather than later. | :01:02. | :01:07. | |
That would be deemed good, within a framework of at least intended | :01:08. | :01:10. | |
stability. The initial phase will be good for the economy because we will | :01:11. | :01:15. | |
see public spending continued to support... Given global demand is | :01:16. | :01:20. | |
the weak link right now. You mentioned public spending. That has | :01:21. | :01:23. | |
been pushing the economies to some degree. And you have to risen, which | :01:24. | :01:29. | |
is what Thailand is known for, the land of smiles, but beyond that what | :01:30. | :01:34. | |
else is helping Thailand in terms of economic growth? -- tourism. Net | :01:35. | :01:38. | |
export has been falling behind and the global demand environment hasn't | :01:39. | :01:43. | |
helped, so this is arguably outside Thailand's control. What is within | :01:44. | :01:50. | |
is the public spending and tourism part. As we proceed forward, as it | :01:51. | :01:56. | |
comes to the monarchy and succession issues, the legitimacy of the | :01:57. | :02:01. | |
military being able to elect officials, that becomes more | :02:02. | :02:04. | |
contentious and that is the medium to long-term risk. We have seen | :02:05. | :02:08. | |
private investment is low in Thailand, and foreign investment as | :02:09. | :02:12. | |
well, so what will it take for these people to come and put their money | :02:13. | :02:18. | |
into this economy? Two things, one is of course difficult for Thailand | :02:19. | :02:22. | |
to determine, that is the global capital expenditure cycle, which has | :02:23. | :02:27. | |
continued to be weak. So the manufacturing sector has also been | :02:28. | :02:32. | |
as a corollary quite weak. Investment is lagging. For more | :02:33. | :02:36. | |
investors to come in, Thailand has great potential, so it is about the | :02:37. | :02:39. | |
stability of government rather than devolving governments. The stability | :02:40. | :02:45. | |
policies, especially investment policies, and no street protests, | :02:46. | :02:49. | |
because they don't bode well, even though we claim they are on separate | :02:50. | :02:53. | |
tracks, but it is a converging track. In other news, China has | :02:54. | :03:00. | |
launched its first mobile telecommunications satellite, the | :03:01. | :03:08. | |
Tian Tong One, serving China, the Middle East and Africa, operated on | :03:09. | :03:13. | |
the ground by a state-owned China Telecom, and it is capable of | :03:14. | :03:17. | |
securely sending and receiving data that cannot be copied, stolen or | :03:18. | :03:22. | |
spied on. Now, the Hong Kong-based digital currency exchange which lost | :03:23. | :03:28. | |
$65 million to hackers last week, is going to spread losses across users. | :03:29. | :03:34. | |
Even though those directly impacted will be losing 40%. Bitcoin has | :03:35. | :03:43. | |
rebounded following that slightly. India's goods and service tax is | :03:44. | :03:47. | |
expected to give a major boost to the economy. And once the that | :03:48. | :03:54. | |
stands to benefit is Indian conglomerate, the Godridge Group. | :03:55. | :03:59. | |
Our correspondent caught up with the chairman and started with asking how | :04:00. | :04:03. | |
the GST will help the Indian economy. I think it will help India | :04:04. | :04:12. | |
tremendously, it will add one and a half to two percentage points to | :04:13. | :04:19. | |
Indian GDP growth rate -- Godrej. The tax rate will be considerably | :04:20. | :04:22. | |
lower on most goods than it is today. On services, it will be | :04:23. | :04:35. | |
higher. It will lead to almost elimination of evasion of indirect | :04:36. | :04:40. | |
taxes, because under the new law evading indirect taxes will be very | :04:41. | :04:44. | |
difficult. If evasion of indirect taxes goes away, it is likely to cut | :04:45. | :04:50. | |
down evasion of direct taxes too because a lot of evasion of direct | :04:51. | :04:58. | |
taxes is to hide indirect taxes. Government collections can go up a | :04:59. | :05:03. | |
lot as the rates will be lower. Prices will be lower, consumption | :05:04. | :05:08. | |
will go up, production will go up. Tell us how it is going to help your | :05:09. | :05:15. | |
company. Tax rates will be lower, we can cut prices, leading to more | :05:16. | :05:19. | |
consumption of the product, leading to more production and investment. | :05:20. | :05:23. | |
Logistics costs will come down a lot. Currently we don't get a set | :05:24. | :05:31. | |
off from all the taxes that go through our input logistics system | :05:32. | :05:34. | |
when we export. Now we will get everything back. All in all it will | :05:35. | :05:39. | |
be extremely beneficial. Historically, if you look at the | :05:40. | :05:44. | |
countries that have implemented GST in the past, the economy has slowed | :05:45. | :05:47. | |
down before they have seen the positive impact of GST. Will we see | :05:48. | :05:52. | |
a similar trend in India? Not at all, I don't expect that at all. You | :05:53. | :06:00. | |
are referring to countries which went from either low or no indirect | :06:01. | :06:04. | |
taxes to a GST or VAT. Here we have a very high indirect tax regime, | :06:05. | :06:11. | |
very complicated, to a simplified, better regime. So I don't think | :06:12. | :06:17. | |
there will be any such case. In fact, I expect from the very first | :06:18. | :06:23. | |
month of implementation, from April 2017 GDP growth will accelerate. One | :06:24. | :06:31. | |
of the biggest trends in alcohol consumption is the explosion in the | :06:32. | :06:36. | |
popularity of craft via globally, and nowhere more so than in | :06:37. | :06:41. | |
Australia. Over the last five years of the industry's revenues in | :06:42. | :06:45. | |
Australia have grown at an estimated annual rate of nearly 10%. And the | :06:46. | :06:51. | |
number of craft or is is up almost 50% in just the last two years | :06:52. | :06:56. | |
alone. -- craft breweries. That has led to the increase in the demand | :06:57. | :07:01. | |
for hops. Let's have a look. Plants grow six metres in the air. We go | :07:02. | :07:08. | |
through and we string overhead trellis work at every single plant. | :07:09. | :07:12. | |
Microbrewery has been a huge growth for us and for the industry and we | :07:13. | :07:16. | |
can say, yes, we know this is how this plant was developed, this is | :07:17. | :07:21. | |
where it was growing, this is the garden it was groaning, so we can | :07:22. | :07:25. | |
follow its whole life basically from its inception all the way to the | :07:26. | :07:28. | |
beer. And that's what the industry wants. -- grown in. The industry is | :07:29. | :07:35. | |
taking notice of what's happening in Australia. We now supply hops | :07:36. | :07:41. | |
domestically, internationally, just selling it to the USA, the UK, | :07:42. | :07:46. | |
Germany, up into Asia, throughout the islands, brewers becoming more | :07:47. | :07:52. | |
passionate about hot varieties that they are then introducing to their | :07:53. | :07:55. | |
beers -- hop. We wouldn't have craft beer without hops, and, | :07:56. | :08:01. | |
specifically, the amazing flavour and aroma of hops that are coming | :08:02. | :08:06. | |
out now. Hops are a precious commodity, so we use them sparingly | :08:07. | :08:12. | |
but compared to the old days of when hops were really just use for making | :08:13. | :08:16. | |
it better, we use huge amounts of hops. The pioneers of craft brewing | :08:17. | :08:20. | |
came from the US on the West Coast and they started using hops more and | :08:21. | :08:24. | |
more to deliver these amazing aromas and flavours. And that is what | :08:25. | :08:28. | |
shocked people into realising that beer didn't need to be bland and not | :08:29. | :08:36. | |
hoppy. So we use hops from all over the world but we just love the | :08:37. | :08:40. | |
flavours that Australian hops in particular are really delivering. We | :08:41. | :08:49. | |
get our beer delivered on Thursday, it comes straight from the brewery | :08:50. | :08:52. | |
and there are a lot of local breweries around here. We cram it | :08:53. | :08:55. | |
into this seller in the basement. There is hardly any room to move | :08:56. | :09:01. | |
because it is, like, stacked. Every square centimetre space is taken. | :09:02. | :09:05. | |
There has been an excursion in craft beer at it continues to gather and | :09:06. | :09:09. | |
momentum. These days I would say it would be very hard to find someone | :09:10. | :09:13. | |
who hasn't been exposed to craft beer somewhere along the line. There | :09:14. | :09:17. | |
is no question that the demand is growing. It is probably, hopefully, | :09:18. | :09:21. | |
continuing to outpace supply. There is a lot of new supply coming on the | :09:22. | :09:24. | |
market but the demand is still growing very quickly. You are seeing | :09:25. | :09:31. | |
demand for hops as you are seeing demand for Asian stocks this morning | :09:32. | :09:34. | |
and let's see how they are trading because the Nikkei is up 1.5%, 1.6, | :09:35. | :09:40. | |
it is rising, as it takes its cue from the US close on Friday with the | :09:41. | :09:46. | |
NASDAQ at a record high and the S 500 at a record high. And you have | :09:47. | :09:50. | |
seen the all ordinaries in Australia also gaining, and that is because we | :09:51. | :09:58. | |
saw some very positive jobs date on Friday, lifting these markets -- All | :09:59. | :10:04. | |
Ordinaries. And that is it for this edition of Asia Business Report. | :10:05. | :10:05. | |
Thanks for watching. The government's being accused | :10:06. | :10:09. | |
of trying to bribe people into accepting fracking for shale | :10:10. | :10:11. | |
gas by proposing payments | :10:12. | :10:15. |