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Macau scraps wine tax

In a bid to become a dominant player in the regional fine wine market, Macau has eliminated its 15% tax on wine.

The move follows a similar decision by neighbouring Hong Kong which scrapped taxes on wine and beer in its spring 2008 budget.

A 10% tax on beer has also been lifted, though a duty of 10% remains on drinks containing more than 30% alcohol.

Wine companies trading with the region support the decision, which they say will have both short- and long-term benefits.

’The wine tax removal will certainly be a cause for celebration among wine lovers in Macau,’ said Timothy Feather, area sales director for Summergate Fine Wines, which also has four offices on the mainland.

Feather said Summergate would be reducing prices imminently to reflect the tax relief, which will have the further effect of strengthening Macau’s position as a fine wine hub.

In 2007, the tiny former Portuguese colony – now a Special Administrative Region of China, like Hong Kong, and one of the world’s richest cities – overtook Las Vegas as the gambling capital of the world.

Like its rival, Macau has sought to transform a seedy image by attracting high rollers by building upmarket hotels, resorts and restaurants – many of which have important wine cellars.

‘I’m sure the guys in Macau have seen how Las Vegas changed in the 1990s,’ said Stephen Williams, managing director of the Antique Wine Company, which earned a third of its £12m revenue in the last year from hospitality clients in Macau.

‘They already have the gambling, and they want to add sophistication,’ said Williams. ‘Wine is a mechanism for making Macau a destination for a wider audience.’

Williams said that in addition to big name Bordeaux, top Burgundy, fine Italian and California wine are gaining in popularity among an increasingly sophisticated clientele, most of which hails from mainland China.

‘We just had a shipment of 20 cases of Screaming Eagle (worth £90,000) held up in customs,’ said Williams.

‘The tax was abolished before it was released, saving the buyer a lot of money.’

Written by Maggie Rosen

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