On October 16, Hong Kong Chief Executive John Lee delivered his third policy address since taking office. In this address, he announced a significant adjustment to the duty on spirits. Starting immediately, for imported spirits priced over HK$200, the tax rate on the amount exceeding HK$200 will be drastically reduced from 100% to just 10%. Meanwhile, spirits priced at HK$200 or below will maintain the existing tax rate.
Currently, Hong Kong imposes a tax of 100% on spirits with an alcohol content exceeding 30%. Due to these high tariffs, the growth of the spirits market in Hong Kong has lagged behind that of wine. In 2023, the total imports of brandy and whiskey amounted to only around US$395 million.
As a key market for mainland China’s liquor exports, Hong Kong accounted for approximately 23% of the mainland’s liquor exports last year, making it the largest export region for Chinese liquor. In 1993, Moutai established the Moutai Hong Kong Trading Company, while Wuliangye set up an overseas marketing center in Hong Kong, and Luzhou Laojiao created Luzhou Laojiao International Development (Hong Kong) Limited. Shanxi Fenjiu is also actively seeking opportunities to expand in Hong Kong and overseas markets.
Lee expressed hope that this adjustment in spirits taxation would replicate the successful experience seen with the elimination of the wine tax, stimulating the spirits trade and, in turn, promoting growth in logistics, warehousing, tourism, and high-end dining sectors.
