Battle of energy drinks

THAILAND’S energy drinks market is expected to see tougher competition this year. Margins could get thinner, as price wars heat up, and global tensions push up input costs.

Among other things, investors are watching aggressive price cuts by TCP Group, the owner of Red Bull energy drinks and the third-largest player in Thailand’s domestic market.

They are also weighing the impact of rising aluminium and energy costs from the Middle East conflict.

Against this backdrop, Maybank Investment Banking Group Research (Maybank IBG) has turned cautious on Thailand’s energy drink names.

“With the rising competition both in the domestic and international markets, we turn more cautious on energy drinks, including Osotspa (OSP) and Carabao Group’s (CBG) earnings outlook,” the brokerage notes in its latest sector report.

It downgrades OSP to “hold” with a lower target price (TP) of 15.10 baht and maintains CBG at “hold” with a lower TP of 36 baht, both based on 13 times estimated 2026 price-to-earnings ratio and minus 1.5 standard deviation of the sector’s five-year mean.

Among beverage names, Maybank IBG still prefers Ichitan, which it rates as a “buy” with a TP of 16.20 baht, on account of its strong 2026 earnings outlook and an attractive 8% yield, supported by stronger demand for ready-to-drink tea amid hotter weather.

Price war

TCP has kicked off the year with a price cut for its flagship Krating Daeng Classic, lowering the retail price to 10 baht per bottle from 12 baht, effective March 5.

The move follows a previous price hike in March 2023, after which TCP’s market share slid from 17.1% in February 2023 to 12.4% in December 2025.

Maybank IBG says this reduction could help TCP regain some market share from competitors such as CBG and OSP.

The brokerage notes that TCP’s latest strategy may materialise faster than OSP’s relaunch of M-150 Yellow at 10 baht per bottle in the first quarter of 2026 (1Q26), which took time to reach nationwide distribution due to inventory clearance of M-150 Gold at 12 baht per bottle.

CBG remains bullish on its ability to gain share, bolstered by expansion into small traditional trade outlets and its CJ More retail chain.

OSP, for its part, remains unperturbed, stating that Red Bull Classic accounts for only around 3% of the market share and that its premiumisation strategy, including enhancements to the 12-baht stock keeping unit (SKU) and upcoming 15 baht launches, remains on track.

Margin squeeze

Still, Maybank IBG sees domestic growth targets under pressure. CBG previously guided for 20% growth in domestic energy drink revenue and a 32% market share by end-2026, while OSP aims for 1%–5% growth.

The brokerage projects domestic energy drink sales growth of 1% for OSP and minus 2% for CBG, both lagging behind expected market expansion of 2%–3%.

“TCP’s latest price move could make these targets more challenging to achieve,” Maybank IBG says.

Retail price continues to be a decisive factor in Thailand, where consumers are mostly blue-collar workers likely to trade down amid weak economic conditions.

CBG, which has maintained a 10-baht price point since 2022, has steadily gained market share.

OSP, by contrast, remains the only leading brand offering a 12-baht SKU among M-150, Carabao, and Red Bull.

Red Bull’s launch of a two-for-18-baht promotion signals a more aggressive pricing stance than previously, reinforcing the sense of a market-wide squeeze on margins.

Meanwhile, Maybank IBG also highlights the potential knock-on effects from the Middle East war.

Aluminium costs, which contribute roughly 3% of both OSP and CBG’s cost of goods sold, have risen 10% year-to-date amid surging oil prices and global tariff pressures.

“As such, aluminium packaging costs for CBG and OSP could be higher in 2026,” the brokerage highlights.

OSP’s consistent use of steel is expected to limit input cost volatility, while CBG faces downside risk to its gross profit margin despite plans to reduce aluminium usage given lower overseas exposure.

Energy costs, on the other hand, are expected to remain stable in the 1Q26 as OSP’s supplier, PTT, Thailand’s state-owned energy company, has indicated a freeze on liquefied natural gas prices until end-May, mitigating short-term concerns.

Maybank IBG projects OSP’s 2026 domestic energy drink growth at 1%, helped by a low base from the first half of the year (1H26) during inventory clearance.

Achieving its target of 1%–5% growth could yield 0.5%–2% upside to earnings, the brokerage points out.

Conversely, CBG’s projected minus 2% growth leaves upside potential of around 12% if it hits its 20% domestic growth target.

The brokerage underlines that competition is not confined to Thailand.

In Myanmar, CBG’s marketing push may challenge OSP, while a continued ban on Thai products in Cambodia is likely to weigh on CBG’s sales in the 1H26.

This combination of domestic price wars and geopolitical headwinds adds further uncertainty to earnings forecasts for 2026, prompting the cautious stance from Maybank IBG.