94.    I pledged in last year's Budget to review the duty on alcoholic beverages.  We have now conducted a two-month public consultation exercise.  I would like to emphasise that the duty under review is imposed not only on wine but also on other alcoholic beverages such as beer, rice wine and spirits.

95.    We have received a diversity of views on the subject.  Those in favour of maintaining the present rate consider that the duty provides a stable source of revenue for the Government and acts as a disincentive to drinking, consistent with the objective of protecting public health.  Those in favour of lowering the duty rate think that this would boost consumption, as the rate is higher in Hong Kong than in neighbouring jurisdictions such as the Mainland and Macau .

96.    Some people believe that drinking wine, particularly red wine, is the preserve of only a few rich people.  This is not the case.  According to last year's figures, the average retail price of the top 10 best-selling wines in Hong Kong was only $55 per bottle.  On the contrary, the high-end products that attracted a duty above $500 accounted for only about 0.1 per cent by volume of the wine market as a whole, an extremely small share.  Reducing the duty on alcoholic beverages, therefore, will not only benefit all consumers but also help promote the culture of wine appreciation in Hong Kong .  In fact, many in the tourism industry, along with other business people, have told me that Hong Kong has the potential to become a wine exhibition and trading centre.

97.    After taking into account the divergent views of the public, I have decided to maintain the status quo for now.

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