Wine lover Suzanne Miao scours the newly revised wine list at a popular Central watering hole and scowls. 'I don't see why I'm still paying HK$75 for a glass of paint-stripper in some poncy bar,' says the children's theatre director. 'As far as I can tell, bars and restaurants haven't passed on the tax break to consumers.'
You might think the bar tab savings would be significant when this year's budget did away with the 40 per cent wine duty levied in 2007, already halved from the year before. Yet the benefits have been a mere trickle so far.
The LKF Entertainment Group says prices at its outlets were reduced by 10 to 20 per cent within days of the announcement on February 27. Watson's Wine Cellar and sister supermarket chain ParknShop cut prices by an average 20 per cent. At Caprice, the French restaurant at the Four Seasons, most wines were also reduced by 10 per cent, although sommelier Cedric Bilien says the quality of his wine menu has improved.
Such cuts seem paltry compared to the extent of tax relief. But although it's happening more slowly than they expected, professionals say wine lovers will enjoy savings from the zero tax regime eventually.
'Market forces will drive [prices] down,' says Nick Pegna, managing director of wine merchant Berry Bros & Rudd, attributing low reductions to 'systemic' factors such as stiff competition among bars and restaurants and fears that lower prices will spark undercutting by new entrants to the business.
'No one likes to drop his pants first, so to speak,' says J.C. Viens, a shipping company director planning to go into the wine trade. 'Most are too shy to lower their prices until they see what their competitors do.'