From the Commissioner
As spring quickly gave way to summer, I managed a reprieve from the Washington heat and continued my travels around the U.S. with visits to Minnesota and New York.
While in Minnesota, I took the opportunity to expound Hong Kong’s market potential and key advantages for U.S. businesses, and university graduates, in speeches at the Minneapolis-based law firm of Dorsey & Whitney, the Minnesota Chamber of Commerce and the Carlson School of Management at the University of Minnesota.
In New York, I focused on Hong Kong’s emergence as a regional wine trading hub.
Having traveled to New York state’s striking Finger Lakes region last year, I know of New Yorkers’ fondness of wine and, of course, the business of wine.
Since Hong Kong eliminated the 40 percent duty on wine in early 2008, Hong Kong’s wine market has bloomed. With no VAT or sales tax, Hong Kong is now the first free wine port among major economies.
Wine imports into Hong Kong were just around US$370 million in 2008, but breached the US$1 billion mark in 2010. Over the same period, wine imports from the U.S. have gone up to around US$57 million, increasing by nearly five fold.
According to the USDA’s Foreign Agricultural Service’s GAIN Report for February 2011, in terms of U.S. wine exports, Hong Kong is set to become the third largest market in 2010. The U.S. is currently the fourth largest wine exporter to Hong Kong behind France, the UK (mainly auction sales) and Australia.
Since 2008, all duty-related customs and administrative controls for wine exports to Hong Kong have been removed. This helps minimizes hassles for traders importing duty-free wine into, or re-exporting from, Hong Kong.
Working with our trade partners, we have entered into 12 Memoranda of Understanding on wine promotion with wine-producing economies and regions, including the U.S. and Oregon and Washington states.
These arrangements strengthen our collaboration with major wine producing economies in the promotion of wine-trading, investment, tourism and education as well as the fight against counterfeit wine.
Another development since the elimination of the wine duty has been the substantial increase of fine wine auctions held in Hong Kong. Auction houses like Acker, Merrall and Condit; Zachys; Sotheby; and Christie have been doing extremely well in Hong Kong.
According to the industry, Hong Kong became the largest wine auction center in the world in 2010. The total wine auction sales in Hong Kong reached US$164 million in 2010.
As more fine wine is shipped into Hong Kong, our government, in partnership with the Hong Kong Quality Assurance Agency, launched a wine storage management systems certification program in 2009, the first of its kind in the world, to accredit storage facilities that meet certain standards. The program aims to preserve the quality of fine wine and its investment potential.
Separately, since June in 2010, we implemented a program with the Mainland Chinese Customs to make it easier to export wine from Hong Kong to the Mainland.
Wine exporters in Hong Kong can now pre-valuate their wine before exporting it to the Mainland of China at designated ports. In addition, clearance time at these designated ports is now as short as one to seven working days.
These facilitation measures not only help increase transparency and certainty for wine traders based in Hong Kong to enter the vast Mainland wine market, but also strengthen Hong Kong’s position as the wine trading and distribution hub in the region.
On the cultural side, the Hong Kong Tourism Board continues to host its popular “Wine & Dine Festival” at our West Kowloon waterfront. The festival is recognized as one of the world’s largest and most prestigious epicurean events.
This year’s festival will take place October 27 to 30 and feature wineries from around the globe, wine tasting classes hosted by well-known sommeliers and cooking classes taught by Michelin-starred chefs. The event entertained 110,000 guests last year.
For vineyard owners and wine distributors, I encourage you to join the “International Wine and Spirits Fair” organized by our Hong Kong Trade Development Council. The fair will take place November 3 to 5.
Last year, the fair attracted a total of 680 exhibitors and more than 14,000 traders. Twenty-one U.S. exhibitors participated last year and we certainly hope to see more this year.
I strongly encourage U.S. wineries and distributors to consider Hong Kong when exploring new export markets. Visitors are also welcome to attend our various wine festivals and dine at our Michelin-rated restaurants.
Hong Kong Commissioner for Economic and Trade Affairs
HONG KONG ECONOMIC AND TRADE OFFICE IN WASHINGTON D.C.
1520 18th Street, N.W., Washington, DC 20036
Tel: (202)331-8947 Fax: (202)331-8958
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