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PSCIT's speech at Wine Industry Conference (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 & Spirits Fair 2009 today (November 4):

Raymond, Distinguished Guests, Ladies and Gentlemen,

     Good afternoon. It is a great pleasure to join you for this Wine Industry Conference.

     I am reminded of something the ancient Greek playwright Euripides once said, and I quote: "Quickly bring me a beaker of wine, so that I may whet my mind and say something clever."

     I don't have a beaker of wine but I would like to thank you all for being here and sharing our vision of establishing Hong Kong as a wine hub in Asia.

     I had the pleasure of addressing this Conference during the first Hong Kong International Wine and Spirits Fair last August.
     I can assure you the past 15 months has been a busy time for my colleagues, myself and of course all of you involved in wine-related businesses.  In particular, the rapid wine-related developments in Mainland have kept us all on our toes.

     Last year I spoke mainly about our aspirations and plans for the wine sector.  This year we have a few achievements to mention.

     For some years now, the wine industry has been keenly watching the shifting demand trend from Europe and the US to Asia.  The growing wine market in the Mainland has attracted particular attention.  Indeed, this is a key area of interest in the Conference this afternoon.  To uncork the Mainland market, Hong Kong is well positioned to play a key role.

     First, besides our geographical proximity to the Mainland, we share the same language and the same culture.  We also have decades of experience in doing business across the boundary.  Last year, we received some 17 million Mainland visitors.  If only half of them take up their duty free quota of two bottles of wine, as you will tell, that translates into substantial business opportunities for our retailers as well as many of you here.

     Secondly, Asia has its own style of cuisine and wine appreciation.  Hong Kong is well recognised as the culinary centre in the region.  Riding on the publication of the Michelin Guide and other similar guides on Hong Kong, we have a unique role to play in matching wines with Asian cuisine.  That in fact is one of the highlights in this year's International Wine & Spirits Fair, in the form of a competition adjudicated by Asian experts.

     Thirdly, Hong Kong has fostered a most conducive environment for wine trading and development of wine-related businesses.  I believe some of you are familiar with most of the facilitation measures that we have taken.  But, let me quickly recap them.

     When our Financial Secretary eliminated wine duties in his Budget in February last year, Hong Kong became the first free wine port among major economies. This is on top of the fact that there is no VAT or GST in Hong Kong.

     Since then we have also introduced a number of supportive measures in areas such as customs facilitation, forging closer co-operation with wine trading partners, manpower training and combating wine counterfeits.
     Private and public training institutions are also responding to the demand for more wine education and training programmes.  Wine education and appreciation is another key area of our co-operation arrangements with wine producing regions so that we can tap their experience and raise standards here. So far, we have signed seven co-operation agreements with wine-producing countries and a region, which is Bordeaux.

     I am pleased to note that the University of Hong Kong's SPACE programme and the Bordeaux Wine School are signing a partnership agreement tomorrow for a wine MBA course.  We didn't have one of those when I was at school.

     These wine education programmes will certainly benefit our local students, consumers and wine lovers.  And because of our bilingual environment, we can also contribute to the development of wine education and appreciation in the Mainland. This is an area with tremendous potential growth.

     I understand that Mr David Wrigley of the Wine and Spirit Education Trust in Britain will expand on this topic in his talk a little later.

     On the fight against counterfeit wines, I hope to share with you what our Customs and Excise Department colleagues are doing. The department is constantly vigilant against possible wine counterfeiting activities, particularly with the growing volume of wine imports.  To strengthen its enforcement capability, the department has set up a specialised investigation team, formed an alliance with the industry, and stepped up co-operation with overseas enforcement agents to promote the exchange of intelligence on fake wine.

Market Response

     The efforts of the Government and the industry, I am glad to say, are paying off.

     Despite the global financial crisis, the market response to our wine-related activities remains positive.  Wine trading and distribution business continue to grow with the value of imports for the first eight months of this year increasing 42 per cent compared to the same period last year.  In the first eight months of this year the value of wine imports amounted to $2.3 billion.  That is considerably more than the $1.6 billion for the whole of 2007 before duties were eliminated.

     A number of new companies have been set up in Hong Kong and existing firms have expanded their wine-related business in the past year.  This includes wine storage facilities, trading companies, retailers and auction houses.

     On auctions, since the elimination of wine duties, no less than 18 wine auctions have been held in this city.  The most recent was just last weekend with more in the pipeline.

     The industry is forecasting that Hong Kong will overtake London this year to become the world's second largest wine auction centre, next to New York.

     As you may have noticed, we are also stepping up our wine promotion work.  This has involved synchronising the promotional strategies of three agencies : the Trade Development Council (TDC), Invest Hong Kong and the Hong Kong Tourism Board.  

     Wine and dine promotion has been our main focus this year.  Capitalising on our city's reputation for culinary diversity, our Tourism Board has adopted "Hong Kong Food and Wine Year" as their theme this year.  The anchor event is our first Wine and Dine Festival which started last Friday and held over the weekend.  The Festival has got great support from our Bordeaux friends, which is a key element in our co-operation agreement with Bordeaux.

     The Wine and Dine Festival, as some of you may have visited, was held at the harbourfront of West Kowloon with Victoria Harbour as a spectacular backdrop to the event.

     It was a big success, attracting some 70,000 people during these two and a half days, far exceeding our expectations.  This clearly demonstrates Hong Kong's potential as a platform for showcasing the finer things in life to Asian consumers, including fine wine and good food.

     I am also delighted that our home-grown International Wine & Spirit Fair of TDC has become an annual event after its successful launch last year.

     This year we have 525 exhibitors from over 34 countries and regions, which is more than double the number we had last year.  

     Traders from countries that have signed co-operation agreements with us have shown a stronger presence than last year.  In particular, Vinitaly has organised their first roadshow exhibition in Hong Kong, as part of the fair today.

     All in all, Hong Kong's development as a wine hub is no accident.  Quite the opposite.  It is an example of how a little creative thinking, determined planning and private sector enterprises can open up new opportunities in a small economy such as ours – even during times of economic uncertainty.

New Supportive Measures

     So what's next, with all these encouraging developments?

     We are currently considering new supportive measures to keep the momentum going.

     This includes a certification scheme for wine storage facilities.  Storage facilities are important in preserving the quality of fine wine as well as its investment potential.  The Hong Kong Quality Assurance Agency, a non-profit-distributing certification body, is assisting the industry to develop the certification scheme.

     Facilities that meet certain required standards would be accredited.  This will give investors and traders greater confidence in using Hong Kong storage facilities, especially as our summers can be quite hot and humid outdoors.

     The Agency recently visited wine storage facilities in Europe and the US to refine the scheme in the light of international standards and best practices.  They plan to roll out the accreditation scheme before the end of this year.

     To achieve Hong Kong's potential as a wine hub in Asia, we must capitalise on our strategic location and relationship with Mainland China.  As the Financial Secretary announced this morning, we have just reached agreement with the Mainland Customs to provide facilitation measures for wine exported from Hong Kong to the Mainland.  We hope to announce the details of these measures in the next couple of weeks. We are also discussing with their other authorities in the Mainland to see if further facilitation measures can be introduced.  We will certainly keep the international wine community posted on our progress.

Way Forward

     Ladies and gentlemen, I have talked about some of our wine-related developments over the past year, as well as initiatives which the Government and the industry are pursuing.  Hong Kong is well-positioned to help traders tap the Mainland market, particularly in areas of wine trading and distribution, auctioning, appreciation and education.

     Finally, we would not be here today without the commitment, dedication and co-operation of the industry professionals, including all of you at this Conference.

     Your vision is our inspiration.

     I hope you all enjoy the International Wine & Spirits Fair, the conference and the wine and dine activities here this week, and of course, Hong Kong in general.

     Thank you.

Ends/Wednesday, November 4, 2009
Issued at HKT 20:56