In Hong Kong, only four commodities are charged with excise taxes and wine is not on the list. Wine producers do not need to pay any tax when importing vintages to the region. All wine duties have been removed since February 2008, making Hong Kong the first free wine port among major economies not only in Asia, but in the world.
The Hong Kong government has gone above and beyond to show support to producers planning to sell wine in the market. The region has been the host for key promotional events, including international wine fairs like Vinexpo and the Wine and Dine Festival. Moreover, the Customs remains vigilant in preventing the entry of counterfeit wines in Hong Kong.
Advantages of Duty-Free Wine Importation in Hong Kong
Hong Kong’s imported wine market has expanded fast since the elimination of duties in 2008. In Q1 of last year, imports reached 29 million liters, valued at HK$6.2 billion (US$790 million). Most of the wines were from Europe, specifically France and the United Kingdom. Value of wine imports likewise increased by 9%. In 2017, sales of wine from on-trade and off-trade channels amounted to US$1,620 million.
Producers flock to Hong Kong primarily due to its favorable environment for imported wine. There are over 3,550 wine-related companies currently set up in the region. Aside from wine trading and distribution, businesses include retailing, warehousing and catering. The industry is also supported by experienced merchants with extensive knowledge of wine, as well as international trade.
Hong Kong is one of the largest wine auction centers in the world. Organizers include some of the famous auction houses like Acker Merrall & Condit and Christie’s. Year after year, there is a surge in demand for high-value wines by investors. Investment grade wines are usually sold through auctions. In 2017, auctions sales were at US$98 million.
Industry players from around the world also view Hong Kong as a convenient distribution hub for their vintages. In 2018, 33% of wines imported to the region were re-exported to different markets. Hong Kong is also the unrivalled gateway to China for imported wines. Due to the Closer Economic Partnership Arrangement (CEPA), all goods of Hong Kong origin can enjoy zero tariff preference upon importation into the Mainland.
Many companies from various sectors of the wine industry are seeking to uncork the huge potential of the Hong Kong market. Although wine exportation to the region involves minimal hassle due to lack of taxes to pay, it is important to note that producers still need to follow certain protocols and regulations set by the Hong Kong government.