Liquor imports have increased by more than 15 per cent since the government slashed liquor tax last year, Hong Kong’s commerce minister has said.
In the six and a half months since liquor duty was reduced last year, the volume of liquor imports in litres rose by more than 15 per cent, compared with the preceding six and a half months, Secretary for Commerce and Economic Development Algernon Yau told lawmakers on Wednesday.
Meanwhile, trade volume went up by nearly 60 per cent, “reflecting that the two-tier system introduced by the government is effective in boosting high-end liquor trading,” Yau said in a written response to lawmaker Jimmy Ng.
At his Policy Address in October, Chief Executive John Lee announced a tax cut on liquor with an import price of over HK$200 – from 100 per cent to 10 per cent – for the portion above that price threshold.
The cut applies to alcoholic beverages with an alcoholic strength of more than 30 per cent.
Other ‘high-value’ sectors
Citing official data, Yau said there were around 2,130 establishments in the alcoholic beverages industry as of the end of 2024, representing an increase of 110 from the previous year, and 6,720 people in the industry last year, marking a decrease of 270 from 2023.
The industry also capitalised on the tax cut by organising wine and spirits fairs, during which the proportion of liquor on sale increased, Yau said. Some traders also lowered the prices of liquor, he added.
Echoing Lee’s speech last year, Yau said that the purpose of the tax cut was to encourage trading in high-end liquor, “thereby giving impetus to the development of other high value-added sectors such as logistics and storage, tourism, as well as high-end food and beverage consumption.”
“At the same time, we are also mindful of the need to avoid increasing liquor consumption among the public as a result of reducing liquor duty, thereby leading to other problems,” Yau added.
Prior to Lee’s policy announcement last year, industry associations reported that most bar owners experienced 20 to 30 per cent drops in revenue compared with pre-pandemic levels.
The Hong Kong Bar & Club Association attributed the slowdown to Hongkongers heading to mainland China during holidays and the migration of wealthy residents.
