We surely do not want zero duty turning HK into smugglers' paradise
Those of us in the wine industry are still grappling with the figures quoted in the budget speech - an 82 per cent increase in wine imports? Wine sales in Hong Kong have shown a much more measured increase.
Nothing we have so far found in the statistics supports this huge jump. Can the financial secretary please explain?
However, significant quantities of wine are being re-exported to the mainland and somewhat less to Macau but no other countries have so far shown much interest in purchasing their wine in Hong Kong.
So the term used by the financial secretary, wine hub, is at best confusing and at worst misleading. Hong Kong always has been the main logistics centre for wine shipments to Macau and southern mainland areas, smuggled, hand carried, or legitimate.
Nevertheless, Hong Kong is geographically most conveniently suited as a business centre in Asia, as it takes roughly four hours only to go north or south to the major cities in Asia.
This does not qualify Hong Kong to be a wine hub - rather as a place to locate regional offices which has been happening anyway and now as a smuggling centre with the zero duty. Surely Hong Kong does not want to get a reputation as a smugglers' paradise for wines and spirits? Yet that is exactly the way we seem to be going.
Zero wine and beer duty is not a sensible policy. There are established importers and brand owners who would like to see a balance in taxes on alcoholic products, and will encourage the reintroduction of a fixed rate of duty on wines and beer.
However, we also support much higher levies on spirits as is the case in most developed economies.
In the meantime, as the southern mainland areas become more experienced in the handling and marketing of wine, and thus bypass the city with its very expensive infrastructure, one way or the other. It is only a matter of time.
We should pour cold water on the present short-term thinking of the government on this matter, which only helps parallel and grey market traders.
Richard Paine, Fine Vintage Ltd
