HONG KONG (AFP) — Hong Kong stands to become an international wine hub and profit from rapidly growing demand in China after abolishing a 40-percent tax on the tipple, industry experts said Wednesday.
Hong Kong Financial Secretary John Tsang on Wednesday scrapped all duty on wine and beer, saying he hoped to create a wine trading and distribution market in the booming southern Chinese territory.
Boris de Vroomen, chairman of the Wine and Spirits Industry Coalition, said the move would "send a strong message that Hong Kong is determined to become an international fine wine hub" alongside London and New York.
"Hong Kong has everything needed to create a fine wine hub and the only thing preventing that was the duty," he said.
"As much as 40 percent of fine wines traded and sold in London are sold to consumers based in Hong Kong but stored in London, so Hong Kong does not benefit."
Wine consumption in Asia has risen sharply in recent years and is forecast to increase further.
De Vroomen, who leads a joint venture between drink-maker Diageo and LVMH, owner of Moet champagne, forecast Chinese consumers would buy around 50 million cases of imported wine a year by 2017, up from just two million now.
Auction house Bonhams responded to the news by announcing it would hold what it said was Hong Kong's first wine sale in a decade.
"Hong Kong has quickly established itself as a growing market leader in the trade and collecting of the finest and rarest wines on the planet," said Frank Martell, Bonhams' international wine director.
"The proposed exemption of wine from duty... has opened up a new dimension in the trade."
Nicholas Pegna, Hong Kong managing director of wine merchants Berry Bros and Rudd, said the decision to scrap duty would make the city "very competitive."
"A bottle of wine will now be cheaper in Hong Kong than anywhere else in Asia," he said.
"It will make Hong Kong into a sensible hub for exporting, primarily into China."
China will be one of the world's top 10 wine consuming nations by 2010, according to a survey carried out for the global wine and spirits convention Vinexpo.
Tsang said scrapping taxes on all alcohol except spirits would cost the government about 560 million dollars (72 million US) a year.
But he said revenues from trading in and storing wine could increase by as much as four billion dollars a year as a result of the move, adding it could also help develop tourism in the city.
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