Liquor tax cut leaves expo traders bubbling with joy

Eunice Lam

Hong Kong's reduced spirits tax has boosted liquor exhibitors' businesses at the China International Import Expo in Shanghai and merchants are optimistic that the lower duty rate will help the SAR become an international liquor trade center.

The six-day expo, which showcased products and services from 52 Hong Kong companies, concluded yesterday.

Vincent Fong Chun-keung, one of the wine and spirits trading exhibitors from Hong Kong, said he had been participating since the first edition of the expo and felt this year's visitor flow was the highest ever. He added that many of the visitors were middle-to-high-end consumers and the sales on the first day of the expo were twice that of the same period last year.

Fong believes the liquor tax reduction would encourage overseas wine and liquor traders to develop their businesses in Hong Kong.

"Many of our industry fellows had contacted us about future corporation opportunities and what Hong Kong [wine and spirit traders] can domany people would come to us and look at our products," Fong said. "This has been a big milestone for Hong Kong in developing as a trading hub of aging spirits."

As announced in Chief Executive John Lee Ka-chiu's policy address last month, for liquor with an import price of more than HK$200, the duty rate for the portion above HK$200 had been reduced from 100 percent to 10 percent; while the SAR had exempted wine duty in 2008.

A representative of a wine and spirits purchasing company from Jiangxi visited Hong Kong exhibitors at the expo and said that the previously high liquor duty had hindered companies from entering the market.

"If they adjust the liquor duty rate, it will help attract a larger variety of spirit brands, especially niche wineries from overseas [to Hong Kong]," she said.

"Hong Kong enjoys the unique advantage of having a large variety of niche wineries, and it benefits the mainland market in developing our own brand, as well as boosting sales."

A liquor manufacturer in the United States welcomed the tax reduction, saying the new policy offers an opportunity to enhance his brand's exposure in Hong Kong and the Asian market.

He added that his brand is expected to enter the Hong Kong market "full scale" next year, and the company is exploring relevant laws and procedures for importing liquor.

He believes that Donald Trump's victory in the US presidential election last week would bring limited impact to the trade in wine and spirits.

The Hong Kong Trade Development Council said it was their seventh year participating at the expo where they set up the Hong Kong Product Pavilion and the Hong Kong Service Pavilion for the city's enterprises.

It also organized over 1,000 business matching meetings to create corporate opportunities between buyers and Hong Kong companies.

eunice.lam@singtaonewscorp.com