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Discussion Starter · #1 ·
Customs Commissioner promotes Hong Kong to international wine traders
Monday, June 18, 2007
Government Press Release



The Commissioner of Customs and Excise, Mr Timothy Tong, today (June 18) told wine traders and wine exhibitors in Bordeaux, France that Hong Kong was centrally located at the heart of Asia and was the gateway for international suppliers to explore the huge potential wine market in Asia.

Speaking at the opening ceremony of the Vinexpo 2007 held in Bordeaux, Mr Tong said that re-export of wines to Mainland China had surged by 120 per cent, from 2.66 million litres in 2005 to 5.89 million litres in 2006.

Hong Kong's re-export of wines to other Asian countries, excluding Mainland China, also surged by 120 per cent, from 1.3 million litres in 2005 to 2.9 million litres in 2006.

Mr Tong told the wine traders that on February 28 this year, Hong Kong halved the duty on wines consumed locally, from 80 per cent to 40 per cent ad valorem. "Provisionally figures in May alone show that some 30 per cent more wines than same time last year are now being sold in Hong Kong - and finer wines too, " he said.

At the Vinexpo Asia-Pacific 2006 held in Hong Kong, Customs and Excise Department set up a booth to offer advice to international wine traders on local duty system, the licensing and permit requirements for wine import and re-export.

Mr Tong was pleased to learn that the Vinexpo Asia-Pacific will be held in Hong Kong in May 2008. By that time, Hong Kong will be the only city outside France to hold the Vinexpo thrice.

Mr Tong is on duty visit to France and Holland from June 18 to 22. After officiating at the Vinexpo 2007, he will attend a meeting with the Head of Dutch Customs in Hague on co-operative issues of mutual concern from June 20 to 22.
 

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Discussion Starter · #2 ·
HK$4b wine hub opens if tax axed, trade says
24 January 2008
South China Morning Post

A coalition representing the hospitality industry wants the wine duty scrapped to help Hong Kong become the region's first fine-wine trading hub.

The Hong Kong Wine and Spirits Industry Coalition also wants the tax on spirits halved.

The coalition says removing the 40 per cent duty on wine would generate at least HK$4 billion a year in sales and related businesses, such as wine storage and fine-wine auctions.

It says auction house Christie's is keen to start wine auctions in Hong Kong if the duty is abolished. Most of the HK$3 billion-a-year international fine-wine auction business is conducted in New York and London.

The London International Vintners Exchange, which provides an electronic trading platform for wine merchants, is also interested in setting up shop in Hong Kong but is concerned about grey- and black-market activity. It said doing away with duty would vastly reduce the problem.

The coalition submitted its recommendations to the government on Monday. A Treasury Bureau spokesman said the coalition's views and proposals would be considered when preparing the 2008-09 budget. Financial Secretary John Tsang Chun-wah will deliver his maiden budget speech on February 27 and is expected to announce a surplus of more than HK$100 billion.

"Abolishing wine duties would be a catalyst in making the city Asia's first wine hub," said Boris de Vroomen, managing director of Moet Hennessy Diageo Hong Kong and chairman of the coalition, which represents more than 80 alcohol brands.

Tommy Cheung Yu-yan, the Liberal Party legislator who represents the catering industry, said Hong Kong could benefit from such a move because the mainland was expected to become the world's biggest wine market in the next decade.

The coalition says scrapping wine duty should save drinkers 22 per cent.
 

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No more duties on most of the alcoholic beverages! :eek:kay:

2008-09 Budget:
115. After taking into account the development potential and the job opportunities that can be created, I believe that we should support the further development of these businesses in Hong Kong. The industry has indicated that the current duty on alcoholic beverages and the related administrative controls are the major obstacles to the development of the businesses. I propose to exempt the duties on wine, beer and all other alcoholic beverages except spirits with immediate effect, and remove the related administrative controls upon amendment of the relevant legislation, so as to facilitate the import, export and storage of these alcoholic beverages. The proposal will cost the Government about $560 million a year.
 

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Discussion Starter · #4 ·
Quite appalling that they'd get rid of a tax of the rich on a luxury good yet they can't even increase an old-age fruits allowance. We all know that if seniors rely on government pension and handouts alone they can barely survive on their own.
 

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Removing wine tax is for boosting the economy. Not as a welfare to drinker. On then other hand, many people including our legco members misunderstood "Fruit allowance". It was intended to be a a token of appreciation to the seniors, not an allowance to those who need assistance. I have met many fruit allowance receivers who are quite wealthy and certainly don't need the money. There ought to be some sort of filtering to ensure that tax payer's money goes to people who need it.
 

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Quite appalling that they'd get rid of a tax of the rich on a luxury good yet they can't even increase an old-age fruits allowance. We all know that if seniors rely on government pension and handouts alone they can barely survive on their own.
Do you think prices of a glass of wine will be reduced now?

The earlier reduction on alcohol tax had the opposite effect - cheers inflation!
 

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Discussion Starter · #7 ·
Removing wine tax is for boosting the economy. Not as a welfare to drinker. On then other hand, many people including our legco members misunderstood "Fruit allowance". It was intended to be a a token of appreciation to the seniors, not an allowance to those who need assistance. I have met many fruit allowance receivers who are quite wealthy and certainly don't need the money. There ought to be some sort of filtering to ensure that tax payer's money goes to people who need it.
I don't buy that at all. The 'fruit allowance', aka the Old Age Allowance, is subject to asset and income limits. For a single person, he/she must not have assets over HKD 169k and monthly income of HKD 5910 or less. For a married couple, the asset limit is HKD 254k and the monthly income limit is HKD 9740. I doubt couples who are earning HKD 9740 a month are considered wealthy in Hong Kong.

Limits : http://www.swd.gov.hk/en/index/site_pubsvc/page_socsecu/sub_socialsecurity/#SSAla
 

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Discussion Starter · #8 ·
_00_deathscar said:
Do you think prices of a glass of wine will be reduced now?

The earlier reduction on alcohol tax had the opposite effect - cheers inflation!
The trickling effect makes it even more absurd to reduce this tax as it won't benefit the consumer fully. The distribution chain will eat up most of the savings before giving a tiny bit left to the average consumer.

Not exactly a benefit for the people at large at all.
 

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I don't buy that at all. The 'fruit allowance', aka the Old Age Allowance, is subject to asset and income limits. For a single person, he/she must not have assets over HKD 169k and monthly income of HKD 5910 or less. For a married couple, the asset limit is HKD 254k and the monthly income limit is HKD 9740. I doubt couples who are earning HKD 9740 a month are considered wealthy in Hong Kong.
There is no asset or income limit if you age over 70, and you are entitle to "Higher Old Age Allowance".
Only if you are 65-69, and your income and asset is within the limit, that you are entitled to "Normal Old Age Allowance".

Reference:http://www.swd.gov.hk/en/index/site_pubsvc/page_socsecu/sub_ssallowance/
 

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Discussion Starter · #10 ·
There is no asset or income limit if you age over 70, and you are entitle to "Higher Old Age Allowance".
Only if you are 65-69, and your income and asset is within the limit, that you are entitled to "Normal Old Age Allowance".

Reference:http://www.swd.gov.hk/en/index/site_pubsvc/page_socsecu/sub_ssallowance/
Yet that Higher Old Age Allowance only amounts to HKD 705, which can easily be recovered by taxes on a few bottles of decent wine.

It seems the government is willing to forgo a lot more in spirits taxes than to spend a little more on a meagre HKD 705 for the elderly.
 

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Surely if the govt were to prevent collusion with all the wine importers, the consumer WOULD get to see a considerable drop in wine prices, as long as they remain competitive? I know the other wine importers don't like Watsons for example because they can't compete with them (in terms of price).
 

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Yet that Higher Old Age Allowance only amounts to HKD 705, which can easily be recovered by taxes on a few bottles of decent wine.

It seems the government is willing to forgo a lot more in spirits taxes than to spend a little more on a meagre HKD 705 for the elderly.
Waiving wine tax is about stimulating the industry and employment and economics. It is an investment which would reap returns. If some investment yield good return, one should go for it and that's it.

Raising the allowance is about spending. I am not saying that it should not spend on elderly, but it should spend wisely on those who really need it.

It is taxpayers' money, not the prossession of a gov't who just spend to please the public.
 

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Discussion Starter · #14 ·
Waiving wine tax is about stimulating the industry and employment and economics. It is an investment which would reap returns. If some investment yield good return, one should go for it and that's it.

Raising the allowance is about spending. I am not saying that it should not spend on elderly, but it should spend wisely on those who really need it.

It is taxpayers' money, not the prossession of a gov't who just spend to please the public.
That doesn't make much sense though, since only a small portion of society is benefiting from a lower tax on a luxury good. Why not reduce utility bills further to stimulate consumption across the whole economy, which will have a far more meaningful impact and a much more powerful return across multiple industries.

In fact, I don't see how a consumption tax decrease would do much to boost Hong Kong's industries. The importers might import more wine, but we're not a wine exporter, so it's not going to benefit the local vineyards and bottlers. What's the stimulus going to be? What's that huge return?
 

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That doesn't make much sense though, since only a small portion of society is benefiting from a lower tax on a luxury good. Why not reduce utility bills further to stimulate consumption across the whole economy, which will have a far more meaningful impact and a much more powerful return across multiple industries.

In fact, I don't see how a consumption tax decrease would do much to boost Hong Kong's industries. The importers might import more wine, but we're not a wine exporter, so it's not going to benefit the local vineyards and bottlers. What's the stimulus going to be? What's that huge return?
Come on, the focus is on attracting Chinese buyers to purchase in HK. Nobody thought about you and me buying wine to stimulate economy.
HK is a free port............................
 

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Discussion Starter · #16 ·
Come on, the focus is on attracting Chinese buyers to purchase in HK. Nobody thought about you and me buying wine to stimulate economy.
HK is a free port............................
Reducing duties alone is not going to entice mainlanders to come to HK to haul boxes of wine back home. Wine is not like cigarettes or baby formula that can be readily transported. With a rising appetite in the mainland for fine wines, you'd think they can afford it given how wealthy and large the middle class is to pay for it even at an absurd price.

In fact, the British levy significant duties on their alcohol, yet as the budget alluded, London is a major wine trading centre.

HM Revenue & Customs Duties Page
http://customs.hmrc.gov.uk/channels...ls&propertyType=document&id=HMCE_PROD1_027236

There's more to it than reducing taxes alone. We need to put an effort with the industry to get this to work.
 

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There's more to it than reducing taxes alone. We need to put an effort with the industry to get this to work.
You argued that the gov't should levy tax on wine for subsidizing the elderly when the Budget proposed removal of wine tax.
You argued that alternative method could be sought when I pointed out that it is for boosting the economy.
You argued that cutting tax is not enough for helping wine trade when I suggested that the measure would stimulate trading from China.

You clearly lose focus and you simply don't like it and keep on arguing.

My last reply to this trend is that: the wine industry has been lobbying for a significant reduction of wine tax for long, without which HK would not be a wine centre as it is in a good position to be.

Reference: http://www.iwinecentre.com/en/simon_says_content.php#s1
 

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Discussion Starter · #18 ·
You argued that the gov't should levy tax on wine for subsidizing the elderly when the Budget proposed removal of wine tax.
You argued that alternative method could be sought when I pointed out that it is for boosting the economy.
You argued that cutting tax is not enough for helping wine trade when I suggested that the measure would stimulate trading from China.

You clearly lose focus and you simply don't like it and keep on arguing.

My last reply to this trend is that: the wine industry has been lobbying for a significant reduction of wine tax for long, without which HK would not be a wine centre as it is in a good position to be.

Reference: http://www.iwinecentre.com/en/simon_says_content.php#s1
I never said revenues from a wine tax should be used to purely subsidize the elderly. I questioned the rationale of a reduction in taxes that will not likely trickle fully to the consumer and the validity of using increased wine trading and sales as a lobbying excuse if the consumer won't fully benefit from a tax break. If the consumers won't save, why buy more, then good luck establishing a wine trading hub. This scheme is likely going to benefit the middle men along the distribution chain the most anyway. Besides, it's not HK government's style to use these types of initiatives to lure business, and may set a bad precedent as other business and industry groups lobby for breaks. Then what will happen? We haven't seen what types of economic spinoff this huge loss in revenues can result. It's quite a huge gamble when we don't see how much we get in return. Would you put your money into something not knowing how much will come back?

My point has always revolved around the fact that wine and alcohol are luxury goodx, and should not be at the forefront of tax cuts when there are elderly people out there who can't meet their basic needs and are dependent on cash payments such as the 'fruit allowance'. I don't think we should worry much about how much the rich are paying for their consumption. If they drink one less glass of wine a day because of the taxes, it won't be the end of the world. But for the elderly, even eating 3 meals a day may be a problem with the miniscule government aid they're getting. We should be downright concerned about their well-being.

The moral reason is not valid. The business reason is not sound. Hence this wine tax reduction is a bad decision. That's my conclusion. If you read my replies all along, that has always been the theme.

Besides, listening to industry lobby groups is not exactly the most prudent thing to do. I have yet to see a reason from economists trying to quantify the economic effects of a wine trading centre, and the likelihood of one being set up as a result of these tax cuts. After the cooking oil industry group fiasco, we know better how much faith we should put in these groups' words.
 

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Discussion Starter · #19 ·
Asia's wine market to grow 10-20 percent in next 5 years: study

HONG KONG, March 11, 2008 (AFP) - Asia's wine market is expected to grow 10-20 percent per year in the next five years with regional consumption set to double, a study released by a Hong Kong trade body said Tuesday.

Mainland China, Hong Kong, Taiwan, Singapore and Korea will lead growth as consumption value in the region excluding Japan will reach 130 billion Hong Kong dollars (16.67 billion US) in 2012 and 210 billion dollars in 2017.

Trade and Development Council (TDC) said mainland China will be the key driving force for Asia's growth with China being the biggest importer in volume. The country will import 870 million dollars worth of wine by 2017.

And Hong Kong will be well placed to take advantage of the Chinese growth after the government scrapped duties on wine and beer, TDC said.

In his budget address last month, Hong Kong Financial Secretary John Tsang announced the scrapping saying it was designed to promote the city as a wine trading and distribution market.

Industry players said the move will help Hong Kong develop as an international fine wine hub alongside London and New York.

Gregory Deeb, general manager of Crown Wine Cellars, said one million cases of fine wine will arrive in Hong Kong soon to take advantage of the removal of the wine duty, which previously stood at 40 percent.

"Hong Kong can become a fine wine trading centre in Asia," he told reporters as the TDC announced Tuesday it will hold the city's first International Wine Expo from August 14-16.

The expo will host wine dealers, cellars, producers and suppliers of related services from Hong Kong, Asia and the rest of the world.

After the government announced the scrapping of wine duty, auction house Bonhams on the same day announced it will hold in April what it said was Hong Kong's first wine sale in a decade.

Acker Merrall and Condit, the oldest wine merchant in the US, also said it will host its first wine auction in the territory in May to tap the growing market in Asia.
 

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Discussion Starter · #20 ·
Inaugural HK wine auction shows Asia wine hub bid

HONG KONG, April 24 (Reuters) - Auction house Bonhams hosted a small but symbolic wine auction in Hong Kong on Thursday, the first since wine duties were abolished in the city as part of an ambitious government-led bid to become an Asian wine hub.

The wine auction, the first such sale in Hong Kong after a 10-year hiatus, hammered off around $1.5 million worth of top vintages including cases of Chateau Petrus from 1990 and 2000 which fetched $57,240 each, along with six magnums of 1982 Chateau Lafite Rothschild which went for $36,151.

The auction, held in a wine cellar converted from a former wartime bunker, drew spirited bidding for top French wines with 96 percent of the 246 lots sold, mostly to local buyers, Bonhams said.

Some star lots however fell short of the pre-auction hype, with a magnum of 1992 Screaming Eagle going unsold after bids fell short of its $25,000 reserve price.

Bonhams hailed the sale as a success and said the former British colony enjoyed solid prospects as an Asian wine hub, particularly with the massive China market on its doorstep.

"It's easy to see that Hong Kong will soon join London and the United States as a major player on the global wine scene," said Frank Martell, the international director of fine and rare wines for Bonhams.

Martell added that robust Asian demand for top vintages was helping the fine wine market weather the global economic slump.

"Asia has been an immense buffer and has made a huge difference because you've got so many people participating at a time when so many people have to pull back," he added.

Hong Kong abolished beer and wine duties in February, which the government said could uncork $500 million of new wine business.

But some experts say Hong Kong faces key challenges including a dearth of premium wine storage cellars and a relatively weak ability to source world-class wines from top vineyards.

"We need time," said George Tong, a respected Hong Kong wine collector who has over 6000 bottles cellared the world over.

"We have a lot of world-class supercollectors in Hong Kong, but they're buying overseas from London or New York or over the Internet, so the (Hong Kong) wine merchants need to build up their presence," Tong added.

Next month, top U.S. wine seller Acker Merrall & Condit will host a $5 million wine auction in Hong Kong, which it has dubbed the largest ever in Asia.
 
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