10 March 2010
Filipe Carvalho, Managing Director, Sogrape Vinhos (IW Hong Kong Ltd)
More wines from Portugal’s Sogrape’s vineyards in Quinta do Seixo in Douro Valley are likely bound for the Chinese mainland, thanks to the new customs facilitation scheme for Hong Kong-based exporters
Portugal’s Sogrape Vinhos set up its Asian base in Hong Kong about two years ago to distribute the company’s brands in the region, including the fast-growing Chinese mainland market.
“We have no doubts that the potential [of the mainland market] is enormous,” said Filipe Carvalho, Managing Director of Sogrape Group (IW Hong Kong Ltd). “China is definitely a growth market for us, although there is a long way to go in terms of distribution, consumption habits and wine education.”
Mr Carvalho said exporting wines to the mainland “has been quite demanding and complex because, many times, customs requirements are not consistent and change frequently.”
That will soon change under an agreement between Hong Kong and the mainland that will make it easier for Hong Kong-based traders to export wine into the mainland.
Traders to Benefit
“The measures to be put in place will help enhance transparency and certainty in doing business, thus facilitating Hong Kong’s wine traders who wish to expand their operations on the mainland,’” said Rita Lau, Hong Kong Secretary for Commerce and Economic Development. The moves, she said, are part of efforts to strengthen Hong Kong’s position as the regions’ wine trading and distribution hub.
Hong Kong Commissioner of Customs and Excise Richard Yuen (front row, left) and Vice Minister of the General Administration of Customs Sun Yibiao sign a cooperation agreement on customs facilitation measures, witnessed by Hong Kong and Chinese mainland officials, including Hong Kong Financial Secretary John Tsang (centre) and Hong Kong Secretary for Commerce and Economic Development Rita Lau (third
The new measures, to be introduced in the second quarter of the year, are open to registered traders. Companies that have been set up in Hong Kong for at least six months and are engaged in wine-related businesses, including trading, storage and logistics, are eligible to register.
Currently, it could take several weeks for wine shipments to clear mainland customs and quarantine procedures. Under the plan, registered traders can ask mainland customs to conduct a duty valuation 10 working days before the shipment leaves Hong Kong. Mainland customs authorities would normally complete the procedures within one working day of the shipment arriving at a mainland boundary point.
For registered traders who choose not to use the pre-valuation service, mainland customs, under the agreement, would strive to shorten the clearance time at the boundary point. Wines that have been imported into the mainland before will normally take no more than three working days to clear, with submission of the necessary documents. Wines new to the mainland, meanwhile, would be processed within seven working days. And if customs clearance is not completed within the timeframe, the goods may still be released with a deposit, to allow the wines to go on the market as soon as possible.
“This measure will definitely make the export process from Hong Kong to the mainland more transparent,” said Mr Carvalho. “It will give more confidence to our partners when importing from Hong Kong.”
Another Step in the Ladder
“The government has provided another step in the ladder for the local wine industry to develop,” said Gregory De’eb, Managing Director of Crown Wine Cellars, Hong Kong’s first fine-wine storage facility. “It provides clarity of the mainland system that’s desperately needed for small exporters unable to establish a strong line.”
Mr De’eb believes that the move will mainly benefit rare and fine-wine exporters. “It locks down the time lines and input process for fine wines to go into China,” he noted.
A clear and transparent system, he said, would avoid delays that could put shipments at risk. “If it’s sitting in improper conditions, you stand to lose the whole shipment.
"Not only has Hong Kong consolidated its position as the regional hub for fine and rare wines, it is continuing to claim
its rightful place on the
world wine stage."
John Kapon, President,
Acker Merrall & Condit
Hong Kong’s fine wine market continues to sizzle, based on results of several key wine auctions held earlier this year. Sotheby’s first Hong Kong wine auction of the year, in January, realised a total of US$6.7 million. Among the highlights was a six-litre bottle of Chateau Lafite 1982, which fetched US$46,700. The 10-hour sale of more than 800 lots saw strong bidding from buyers throughout Greater China, Sotheby’s said.
Acker Merrall & Condit’s first auction of the year, held last month, achieved even higher results, raking in US$7.6 million. Two cases of Chateau Petrus 1982 sold for US$88,041 each.
“The excellent result sends a very clear message,” said John Kapon, Acker Merrall & Condit’s President and Auction Director. “The wine market in Hong Kong is extremely robust. Not only has Hong Kong consolidated its position as the regional hub for fine and rare wines, it is continuing to claim its rightful place on the world wine stage.”
Last year, Hong Kong overtook London as the world’s second largest wine-auction centre, after New York. But Mr Kapon believes the city will go on to take the top spot. “We predict that in 2010, Hong Kong will go further and become the world’s leading wine auction centre.”
“It’s great not only for fine-wine exporters but for mainland consumers, because it will raise the quality of wine available on the mainland market. And that, for someone who’s as passionate about wine as me, is good news.”
Asia’s Wine Hub
The agreement, signed last month, is the latest effort to develop Hong Kong as a regional wine hub following the abolition of wine duties in 2008. The value of wine imports soared 80 per cent that year from 2007, and increased another 41 per cent year-on-year in 2009. The mainland’s wine imports are projected to grow to as much as US$870 million by 2017, representing 58 per cent of the Asian market, excluding Japan.
The government said it would continue exploring new measures to help the trade make further inroads into the mainland market.
“We will also continue to discuss with the relevant mainland authorities in mapping out possible facilitation measures on the quarantine side,” said Assistant Secretary for Commerce and Economic Development Aubrey Fung.
Shenzhen will be the testing ground for the new customs facilitation scheme. After a review of the measures six to nine months after its introduction, the scheme may be extended in phases to other major mainland cities, including Shanghai, Guangzhou and Beijing.