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Following is the speech by the Financial Secretary, Mr John C Tsang, at the meeting with Wines of South Africa (WOSA) at La Motte Vineyard, South Africa, today (December 9, South Africa time):
Distinguished Guests, Ladies and Gentlemen,
Good morning, or perhaps I should say "Howzit".
I am delighted to join you all this morning. Thank you all for coming.
I am told that Franschoek means "French Corner" in English. This is appropriate because the French know a thing or two about wine as well.
I have only been in South Africa a few days, but I've already learned that you do things a little differently in this country.
For example, you don't have Bar-B-Q's like we do in Hong Kong, you have braais; you don't have evening cocktails on the veranda, you have sundowners on the stoep. I have also discovered that your wines are full of character and flavour.
Cape Town lives up to its status as a member of the Great Wine Capitals Global Network. And the winelands of the Western Cape are truly world class.
Thanks to exporters such as the Wines of South Africa (WOSA) members, people in Hong Kong enjoy the fine wines from this part of the world.
When I eliminated wine duties in my Budget in 2008, Hong Kong became the first free wine port among major economies. This initiative also complements Hong Kong's long-standing strategy as a business-friendly city. In Hong Kong, we have no VAT or GST, no capital gains tax and no death duties. Profits tax is capped at 16.5 per cent and people pay no more than 15 per cent salaries tax.
With low, or no, taxes as well as a prime location in Asia and world-class logistics infrastructure, Hong Kong has quickly developed into a wine trading and distribution hub for our region.
The total value of our wine imports jumped 80 per cent in 2008; 41 per cent the following year; and 73 per cent last year. In just the first nine months of this year, the value of our wine imports exceeded 8 billion Rand (US$941 million). That is a 57 per cent increase year-on-year.
Our wine imports from South Africa alone exceeded 26 million Rand [US$3 million] last year. They also increased 38 per cent in the first nine months of this year compared to the same period last year. This follows growth of 19 per cent, 33 per cent and 38 per cent in the previous three years. But there is still plenty of room for growth.
We are doing quite well, especially when you consider that during this period we have been in the grip of the worst global financial crisis in more than a generation.
Our wine auction business has also flourished. We have firmly established our position as one of the three largest wine auction centres alongside London and New York. Last year, Hong Kong moved ahead of New York to become the world's largest wine auction centre. So far this year, we have held 26 wine auctions with total sales valued at some US$200 million, which is already more than for the whole of last year.
There are plenty of wealthy wine investors and consumers in our part of the world. Although Hong Kong is a relatively small city with a population of seven million people, we attracted over 36 million visitors last year. We are also the premier international gateway to vast markets in Mainland China and around Asia.
According to industry projections, wine consumption in China – including Hong Kong – will grow by a further 20 per cent in the next three years. More traders from different wine-producing countries are choosing Hong Kong as a springboard to tap this vibrant and complex market.
We have the expertise, network and logistics infrastructure to promote wine trading throughout our region. Other initiatives include customs clearance tailored to the wine trade and a wine storage accreditation scheme. This scheme helps traders identify wine storage facilities which meet international standards.
I am delighted that Wines of South Africa has taken part in the various wine promotion events in Hong Kong in recent years. South African wines featured prominently at the Hong Kong International Wine & Spirits Fair last month. Organised by our Trade Development Council, the Fair has become Asia's biggest wine exhibition – so please book early for 2012! Also, don't forget to visit Vinexpo Asia-Pacific hosted in Hong Kong for the fifth time in May next year.
Ladies and Gentlemen, we don't have any vineyards in Hong Kong, but we do have low taxes, a business-friendly environment and vast markets on our doorstep.
So, please do come and visit us in Hong Kong for sundowners. That way, you can see for yourselves the opportunities for the wine trade in our neck of the woods. I am sure that you will not be disappointed.
Thank you very much.
Ends/Friday, December 9, 2011
Issued at HKT 21:02
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