The Economic Contribution of International Spirits in Hong Kong
Commissioned by
The European Chamber of Commerce in Hong Kong
Since fully reopening its borders in 2023, the Hong Kong government has aimed to attract international tourists and stimulate consumer spending in the hospitality and retail sectors. A key element of this strategy is providing a high-quality and diverse range of food and beverage options.
Commissioned by the European Chamber of Commerce in Hong Kong, this report by Oxford Economics examines the contribution of international spirits—an important component of Hong Kong’s tourism and hospitality offerings—to the economy.
The trend of “premiumisation” is shaping the recovery of these sectors, characterised by consumers increasingly opting for more expensive, higher-quality products. This report also explores the economic opportunities that premiumisation presents for Hong Kong.
Meanwhile, the current 100% ad valorem excise tax on spirits discourages premium consumption. In this report, we review studies from institutions like the World Health Organisation, which advocate for a shift to specific excise taxes based on volume or alcohol content, instead of value. Such taxes are more effective at discouraging excessive consumption and can support premiumisation by creating a more favourable market for high value products and services. It can also reduce administrative burdens, and lead to more stable tax revenues.
Our analysis suggests that international spirits contributed HKD 1.4 billion to Hong Kong’s GDP in 2023, supporting around 5,200 jobs and generating HKD 1.3 billion in tax revenues. Reforming the tax structure could further enhance the spirits industry’s economic benefits, bolstering Hong Kong’s position as a leading spirits hub in Asia and aiding the city’s recovery from the pandemic.
The experts behind the research
Our Economic Consulting team are world leaders in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. Lead consultants on this project were:
Liam Cordingley
Lead Economist, Economic Impact
Hwee Shi Yong
Graduate Assistant Economist, Economic Impact
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