by Jeannie Cho Lee MW
Effective 26 August 2008, all duty on wine and beer was eliminated in Macau. The move mimics Hong Kong’s much publicized duty elimination in February 2008. Officials from Macau’s Economic Services Bureau and Consumption Tax
Division were reluctant to comment publicly on what triggered the decision. Privately, one government official said, "It was a defensive move, partly to be in line with what was happening in Hong Kong and partly to counter rising inflation and fast-paced development in Macau.”
Patricio de la Fuente Saez of Links Concepts says, "The duty elimination hasn’t made any impact and it won’t make any impact. Buyers of expensive, fine wines will continue to buy regardless of price since most of these are given away to high rollers by casinos. At the bottom end, the prices were always very low so the impact is minimal.”
One concern arising from Macau’s new status is the increase in smuggling to China since borders between Macau and China (main entry point Zhuhai) are less scrupulously maintained than borders between Hong Kong and China. Saez says, "I believe this will become an increasing concern. It doesn’t need to be illegal - all you need is a team of Macau residents who don’t need visas to enter China to go back and forth all day carrying their legal limit of wines.”
Rob Temple, general manager of ASC for both Hong Kong and Macau, is less concerned. "I believe controls will tighten and the border officials will be wary of what is happening. Smuggling will be impossible to eliminate, but it can be more tightly controlled as with the border between Hong Kong and China,” Temple adds that ASC Macau and Hong Kong has merged and this move follows a shift in the majority of stock, which will be stored mainly in Hong Kong rather than in Macau.
Companies that operate in both cities are encouraged by Macau’s move, which has had little impact on sales and consumption. However, most bets are on Hong Kong and its bid to become the fine wine centre for Asia.
To read Jeannie Cho Lee MW’s full market watch on Macau visit our website at http://www.wine-business-international.com/156-bWVtb2lyX2lkPTM1NyZtZW51ZV9jYXRfaWQ9--en-magazine-magazine_detail.html
