Hong Kong has slashed liquor tax but can it take on trade hubs like Singapore?

Whisky merchant John Rhodes raised a glass when Hong Kong slashed its liquor tax recently, hoping the city’s move will boost his business by allowing him to bring in more fine spirits and promote his brand, while also providing opportunities for expansion into mainland China and other Asian countries.

Rhodes, 59, who founded his company Jon Dory in Hong Kong a decade ago and imports Scotch whisky and offers private cask services, said the city was still a “showroom window” for worldwide brands and an easy way to get into the mainland.

But the tax cut did not go far enough if the city wanted to compete with established rivals such as Singapore and Taiwan, he said.

“If you look at somewhere like Taiwan, where they have absolutely a zero per cent tax with minimal import charges, it is really the hub as so much product goes in and out. Singapore is also another hub,” said the Briton, who has lived in Hong Kong for 30 years.

Rhodes and other merchants said the cut would result in opportunities to bring in more high-end and high-value spirits to the city for trade in Asia but trade-related charges, rent for storage and logistics costs remained high. And Hong Kong was still lagging behind the mainland and Singapore in terms of trade value in the region.

In his latest policy address in October, city leader John Lee Ka-chiu floated the idea of turning Hong Kong into a global spirits trading hub.