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Delhi Wine Club

Posted: Monday, September 01 2008. 17:58

Macau Follows Duty Free Hong Kong

While the myopic India is adamant at 150% customs duty on imported wines and the belligerent Maharashtra refuses to budge from the additional 200% excise duty, its tiny fraction Macau has announced eliminating duty on wine, following the similar move by neigbouring Hong Kong earlier, reports Subhash Arora.

Hotel Wynn, Macau
When Hong Kong announced the scrapping of duty, delWine had predicted it would aim and actually become the Asian hub for wine. By taking this progressive step, it pre-empted Singapore which seems to have been caught in a tax juggernaut.

The neigbouring Macau has now eliminated the tax-which at the existing 15% was less than even the 20% VAT in most of India. The existing 10% tax on beer has also been lifted, though a duty of 10% remains on liquor with higher than 30% alcohol level.

The importers in Macau have promised to immediately reduce the prices to reflect this action. The move may not threaten the march of Hong Kong to becoming an undisputed Asian  hub due to the strong existing infra structure but it will certainly give Macau a fillip in becoming the wine and gambling capital of the world and making its economy stronger. Wine will become a mechanism to promote Macau a destination for even wider audience now.

While India looks at China with admiration and frustration at times because of the phenomenal progress it has made in such a short time, this small former Portuguese colony enjoying the same special administrative status as Hong Kong with China, has become one of the richest cities of the world and last year quietly overtook Las Vegas as the gambling capital.

Macau has some of the world's best restaurants and biggest hotels and like Las Vegas they feel proud to showcase world's best and most expensive wines without worrying about the high taxation like in India. London based Antique Wine Company dealing with some of the world's finest and most expensive wines of vintages as old as 150 years, reportedly generated a third of its revenues from Macau alone last year.

Carry on Hong Kong

In the meantime, Hong Kong has gone a step further in demonstrating its commitment to the industry and making it a wine hub by signing a special memorandum with France recently.

The two sides will strengthen cooperation, exchanges and the sharing of experience in areas including the stimulation of wine-related trading and investment activities, wine education and manpower training, promotion of wine-related tourism and wine culture, according to a communiqué.

Endorsing the viewpoint taken by Indian Wine Academy, Michel Barnier, the French minister for agriculture and fisheries says, 'Hong Kong is the natural wine hub for Asia and is well positioned to catch the emerging business opportunities of the fastest growing international wine market, thanks to its logistical and financial expertise, its unique knowledge of the Chinese mainland's market as well as the strength of its hospitality and retail sectors.'

Pic of Macau:
France continues to be the largest supplier of wine to Hong Kong, capturing 30% of imported wines last year in volume but 57% in value, enjoying a phenomenal growth rate of 108% compared to 2006. The statistics also re-inforce the general belief that the denizens of Hong Kong (and Macau, presumably) prefer better quality and expensive French wines.

E Tu China?

China does not seem to have interfered with the no-duty policy of the two administered territories so far, despite the tremendous pressure it is going to put on its own imports where despite a total taxation of around 40%, there have been cases of under-invoicing, arrests of big fish importers and penalties imposition. It is learnt from reliable sources that runners can get any wine from Hong Kong to China and with the new leakage point there is bound to be a huge import through these two channels.

It is a scenario many people in Asia, especially in Singapore and everyone in China would be keenly watching in the near future.

Subhash Arora


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