The average retail price of wine in Hong Kong has fallen by nearly 20 per cent since the 40 per cent duty was scrapped in the budget two weeks ago, a survey has found. The study by market research company International Wine & Spirits Record found retail prices had dropped by an average of 19.6 per cent based on a sampling of 199 wines. The reductions ranged from 12.5 per cent for champagne to 23.7 per cent for American wines. Tommy Cheung Yu-yan, the Liberal Party legislator who represents the catering industry, said: 'I can't rule out that prices of some wines were raised one or two months before the announcement, but this can happen due to higher costs from foreign exchange rates, like the euro.' Scrapping the duty was intended to help Hong Kong become a hub for fine wines. Doug Rumsam, managing director of Bordeaux Index's Hong Kong office, said it would be difficult for shops to immediately reflect the entire duty cut in their prices until they had used up existing stocks of fully taxed wines. Consumers should not expect to see enormous price reductions beyond 20 per cent given the overall rising cost of wine, he said. Bordeaux Index is the largest fine-wine distributor in Britain. To help dispel fears that retailers and distributors might be pocketing the tax savings instead of passing them on to consumers, nine catering groups representing about 1,000 outlets said they would cut their wine prices by up to 20 per cent immediately or in the coming few weeks. They include Lan Kwai Fong Entertainments, El Grande group and Maxim's Caterers. Lan Kwai Fong founder Allan Zeman said overall business had risen by about 15 per cent since the duty announcement. Outlets in Lan Kwai Fong have slashed wine prices by between 10 per cent and 20 per cent despite having stocked enough wine to last for about five months.