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Speech by PSCIT at Wine Industry Conference of Hong Kong International Wine Fair 2008 (English only)

     Following is a speech by the Permanent Secretary for Commerce and Economic Development (Commerce, Industry and Tourism), Miss Yvonne Choi, at the Wine Industry Conference of Hong Kong International Wine Fair 2008 this morning (August 14):

Fred (Lam), Distinguished Guests, Ladies and Gentlemen,

     Good morning. A warm welcome to you all to this inaugural Hong Kong International Wine Fair organised by the Hong Kong Trade Development Council.  

     Wine critic Robert Parker Jr once said, and I quote: “When I put my nose in a glass, it's like tunnel vision. I move into another world, where everything around me is just gone, and every bit of mental energy is focused on that wine.”

     Though not all of you here are connoisseurs or wine lovers, I thank you for joining us today as we focus our mental energy on a common vision of establishing Hong Kong as a wine hub in Asia.

     In this regard, your thoughts and insights about the challenges and opportunities that the wine trade faces in developing the Mainland China and  wider Asian markets are invaluable.

     From my side, I wish to share with you how the HKSAR Government sees this vision and what we are doing to position Hong Kong as a trading and distribution centre for wine in this region.

     In the world of wine, London and New York are the two major trading and distribution powerhouses.  We are confident Hong Kong can, and will join this premier league of international wine centres.

     Although it will take time to make up ground on New York and London, we have every reason to be confident.

     Hong Kong has a long-established status as a free port, we have a robust financial system, level-playing field for business, extensive brand marketing experience and world-class logistics infrastructure. These are some of the factors that give Hong Kong an edge in developing business opportunities, including opportunities related to the wine sector.

     There are of course other factors too.

     According to a consultancy study by our Trade Development Council (TDC), Asia currently accounts for about 7% of total global wine consumption.  This is small for a region that covers about half of the world’s population.  Given the economic growth, increased prosperity and lifestyle changes in the region, we can anticipate significant growth in the demand for wine across Asia.  

     The industry also predicts that the total consumption value of wine in Asia – excluding Japan – will double to US$17 billion by 2012.  It will increase further to US$27 billion by 2017. Within Asia, Mainland China is the biggest wine importer.  

     Given our strong business connectivity with the Mainland and experience in doing business there which has been built over decades, Hong Kong is well placed to take advantage of this anticipated growth.

     No doubt, Mr Don Pierre (ASC Fine Wines) and Mr Liu Yuan (China National Association for Liquor and Spirits Circulation) will expand on the China factor a little later.

     Now, allow me to take you back a few months.

     In his Budget in February, our Financial Secretary took a key step of eliminating the duty on wine. The market responded quickly and positively. For example, in the past six months we have seen a resurgence in wine auctions here. Bonhams got the ball rolling with a sale in April, and in May an auction by Acker Merrall & Condit fetched an Asian record of US$8.2 million.

     Both companies and some others have more sales planned in Hong Kong.

     These high-profile auctions have helped to spread the word of Hong Kong’s ambitions in the wine sector far and wide. Earlier this summer I was in London and Bordeaux. I met the Chairmen and CEOs of leading wine companies, as well as wine merchants.  They all see tremendous potential for using Hong Kong as a platform for tapping the emerging Asia market particularly in Mainland China.

     We have also maintained a close dialogue with the local wine industry, and we are very encouraged by their optimistic business forecast as well as concrete business expansion plans of our wine merchants, storage and logistics companies.

     The speed at which our TDC successfully rolled out this “home-grown” International Wine Fair also carries an important message about Hong Kong.  When we see an opportunity we move swiftly and decisively. I am sure the business community will take full advantage of this Wine Fair.

     Eliminating wine duty was just the first step.

     Since June this year, all duty-related administrative controls for wine have been removed.  So, no more permits or licences are required for wine trading or storage.  People in the trade tell us they feel so much “lighter” with the abolition of such administrative work.

     Another business facilitation measure involves customs clearance. Since July, wine traders importing wines in refrigerated containers can choose their preferred location for customs inspection of their goods.  These inspections could be conducted at premises with temperature and humidity controls that help preserve the quality of their wines.

     One successful business formula around the world has been integrating wine with other related areas such as tourism, exhibitions, catering and hospitality. Here in Hong Kong we are pursuing this with vigour.

     Among others, we are identifying heritage sites in Hong Kong that may be suitable for such multiple wine-related uses. These could include food and beverage, a wine museum, a wine school or wine appreciation facilities. Expressions of interest from the trade will be welcome.  

     Making the most of these opportunities requires a combined approach including various agencies such as the Tourism Board, our investment promotion agency InvestHK and TDC.

     The Hong Kong International Wine Fair is one such good example. Along with the Wine Fair, the Tourism Board is promoting Hong Kong as a culinary centre, highlighting the magic of fine dining together with fine wine.
 
     Also, in recent months, InvestHK has put in a lot of effort into attracting and facilitating the setting up of wine businesses in Hong Kong with encouraging results. Colleagues in InvestHK are eager to assist all of you.

     Elaborating on his Budget initiative of zero wine duty, the Financial Secretary has repeatedly stressed the importance of job creation.  Some new jobs have already appeared in the wine industry in the last few months and we expect more to come. In this regard, an urgent task is to provide the right training for people wanting to pursue successful careers in the industry.

     To enhance training, we have facilitated exchanges between the industry and local institutions providing wine-related courses such as Vocational Training Council and the University of Hong Kong’s SPACE programme.  These institutions are planning to enhance their curricula or start new ones for personnel ranging from sommeliers to frontline staff involved in logistics and warehousing.  We are also exploring possible collaboration with overseas training institutions to organise exchange programmes as well as wine-related education and appreciation courses.

     Finally, it is important that we remain vigilant against counterfeit wine. Hong Kong has achieved a clean record in this area and we intend to keep it that way.

     Our Customs and Excise Department is forming an alliance with the industry. It is strengthening liaison with overseas enforcement agencies to exchange intelligence regarding fake wine.  As an example, our Customs people have made special arrangements at this Wine Fair to ensure quick action to combat any suspected counterfeit wine.

     Ladies and Gentlemen, I have highlighted some of Hong Kong’s fundamental competitive advantages in becoming a trading and distribution centre for wine in Asia.

     Clearly, it is not enough just to be in the right place at the right time. We need the right business facilitation measures, the right contacts and the determination to make it work.

     Above all – and this is where you come in – we need the knowledge and expertise to become the best place for international companies to tap the full potential of the market for wine in Mainland China and throughout Asia.

     This Wine Industry Conference has an important part to play in helping us to achieve our goals. Thank you for your support and I wish you all an enjoyable and fruitful conference.

     Thank you.

Ends/Thursday, August 14, 2008
Issued at HKT 16:21

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