On October 16, Hong Kong Chief Executive Lee Ka-chiu said that in order to promote the trade of spirits, Hong Kong currently imposes a tax of 100% on the import price of spirits (alcohol with an alcohol concentration of more than 30%). From now on, the tax rate on the import price of spirits above 200 yuan will be reduced from 100% to 10%, and the tax rate on the portion of spirits above 200 yuan and below 200 yuan will be reduced. And for imports of spirits priced at $200 or below, the duty rate will remain unchanged.

In the face of increasing competition in the stock market, can the liquor industry accelerate the pace of internationalization under the favorable promotion of the reduction of spirits tax in Hong Kong?

Hong Kong is one of the important markets for liquor exports, China Food, soil and Animal Import and Export Chamber of Commerce Wine importers and exporters branch data show that in 2023, 23.52% of liquor exports through Hong Kong, China, although the export volume fell by 1.84%, but 189 million US dollars of exports increased by nearly 17.75%.

Talking about why Hong Kong, China, was chosen as an important support point for the internationalization of liquor, some industry insiders said that Hong Kong, as an international financial center, has a sound financial service system and a free economic environment, which provides strong support for the rapid promotion of international business. As a meeting point of Chinese and Western cultures, Hong Kong provides a unique platform for promoting Chinese liquor culture and enhancing the identity of the international market. In addition, Hong Kong's rich international marketing resources and government support have also helped enterprises establish a wide range of international sales models and channels.

However, although baijiu is sold in local retail terminal stores, due to high spirits taxes, the price of baijiu has long been higher than other Asian markets, curbing the growth of local baijiu consumption.

Liquor industry analyst CAI Xuefei said that Hong Kong is an important trade turnover port, significantly reduce the import tax on spirits, will inevitably stimulate the alcohol sales market, "tax cuts will directly reduce the consumption threshold of high-end spirits, reserve more profit space, but also directly stimulate the related distribution, marketing business development."

The Hong Kong market has always been regarded as a "bridgehead" for liquor enterprises to go international. The reduction of tariffs on spirits may effectively promote more famous and high-quality liquor enterprises to go out.

Kweichow Moutai has worked in the international market for many years, and the relevant person in charge of the company said: "As an important window linking the mainland to the world, the Hong Kong market is a key market for Moutai, which is crucial to the company's international construction." In the future, the company will combine relevant policies, formulate and improve the market promotion plan as soon as possible according to local conditions and conditions, and help Moutai better go to the world."

"Hong Kong's reduction of tariffs on spirits is a great benefit for second-high-end and above liquor products, and the most direct is that the retail price of such products will be significantly reduced to attract more consumers." At the same time, the burden of tariffs on liquor manufacturers and Hong Kong dealers has also been reduced, creating more space for the development of enterprises in Hong Kong." Gujing Gong wine to "Securities Daily" reporter said.

It is understood that high tariffs are one of the main obstacles to the current Chinese liquor "going to sea". At the 2024 China Liquor Culture International promotion event held on October 11, Li Anjun, deputy general manager of the Party Committee and chief engineer of Anhui Gujinggong Liquor Co., LTD., said that liquor is a daily consumer product in China, but due to the impact of trade rules, the import tax on spirits in many countries and regions is as high as 100% to 300%. It makes liquor become a luxury after "going overseas", which has a certain impact on its overseas promotion.

Hou Xiaohai, chairman of the board of directors of China Resources Beer, said that the poor performance of Chinese baijiu overseas is mainly due to foreign consumers' awareness of the baijiu category, taste, scene (Chinese food), and the historical culture of Chinese baijiu has not been recognized. In Europe and the United States, the threshold of the recognition of liquor as a spirit category has not yet passed.

"Technical barriers to trade represented by technical standards, technical regulations, packaging and labeling rules, etc., not only raise the entry threshold of Chinese liquor in the international market circulation in disguise, but also bring risk barriers to sales and operations in the form of policies and regulations after liquor enters the market of importing countries." Luzhou Laojiao said.

"At present, although some high-end baijiu has successfully entered overseas markets, the main consumers are Chinese institutions and Chinese people abroad." Industry insiders who have been engaged in alcohol trade overseas told the Securities Daily reporter that although liquor has been distributed and sold in many channels abroad, foreign consumers have less contact with liquor, limited cognition, and the alcohol degree is too high and the spicy taste of liquor is intimidating.

The person in charge of Shanxi Fenjiu said that although liquor "going overseas" faces the influence of many objective factors, the successful export of Zhenlu and Japanese sake is worth learning and drawing lessons from liquor enterprises, and clear export positioning and accelerating brand building will be the key issues that Chinese liquor "going to sea" needs to be solved.

In the view of the industry, the road to "going overseas" of liquor is not a smooth road, and multiple challenges such as high tariffs, cultural differences, technical barriers to trade and limited awareness of overseas consumers of liquor still exist. In the face of these blockaded points, liquor enterprises need to actively respond, strengthen brand building, improve product quality, deepen cultural promotion, and make full use of Hong Kong as an international platform to gradually break through market barriers and achieve a higher level of international development.