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ASC Fine Wines, headed by non Chinese may also see the
deportation of some of its top executives including founder Don St. Pierre
and his son, Managing Director Don St. Pierre Junior.
However, the Communications Director of the company
Adam Steinberg puts a brave front in announcing that, "this is a
routine inspection carried out by China customs." He also affirmed
that a similar raid had taken place in previous years and the company
was fined an undisclosed amount.
However business had remained unaffected and ASC continues
to grow as China's largest wine importer. It rrepresents more than 800
wines and 80 producers in 13 countries.
The article has been published on
jancisrobinson.com, by wine consultant Simon Tam, director of the
International Wine Centre in Shanghai and Hong Kong
Wine is subjected to relatively low customs duty of
48.18% of the CIF value in China. Apparently it has been common practice
by a number of wine importers to under invoice their shipments by more
than half, thus reducing the total cost of a bottle of wine by over 24%.
This manipulation of declared wine value has the potential
to have a sizeable impact on a company's profitability by lowering the
sale price, increasing profit margins and driving business away from the
smaller companies who don't have the luxury of generating the volume of
sales needed to strive.
Garry Anderson, Vice-General Manager of Gelipu Wines, a small wine importer
focusing on boutique Australian varietals commented about the imbalance
thus created by saying, "I'm just tired of standing in the aisle
at Jenny Lou's (a Beijing supermarket selling imported wines] and seeing
bottles of Australian wine available in Beijing for less than I would
pay for them in Australia where there is no tariff."
Ironically, Hong Kong announced a total waiver of importer duty during
the last month's budget to make it a hub for wines in the far east and
including for the Indian market. Many insiders feel that the step may
have been provocation due to the abolition of taxes in Hong Kong and taken
to keep the importers under check.
The action may give a sense of Déjà Vu
to many in India where under-invoicing is not uncommon-what with 150%
customs duty and 200+% excise duty added to the CIF value, the temptation
can be understandable though not desirable. Many new importers who are
facing the heat at the moment have privately disclosed to delWine that
they find very difficult to be competitive as they do not indulge in this
practice, as a matter of principles.
With Delhi government expecting to charge excise on
the MRP, this practice would soon be under pressure. However, there would
always be some temptations to save a part of the 430% taxes that are capped
in Maharashtra, a practice that perhaps helps them in Staying Alive.
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