Yoon and Lam BMC Public Health 2012, 12:717 http://www.biomedcentral.com/1471-2458/12/717 Page 3 of 12 Table 1 Chronology of events related to alcohol tax policy in Hong Kong (2000–2008) Year 2000 2000 2001 2002 2002 2002 2004 2006 2006 2006 2007 2007 2008 2008 2008 2008 Month June August February February June December January November December February February January February February June Event A commissioned consultancy study on the assessment of Hong Kong’s potential to develop into a distribution and trading centre is completed by the Trade and Industry Bureau together with Hong Kong Trade Development Council (1999–2000). Financial Secretary Donald Tsang indicates Hong Kong is well placed to develop into a wine distribution hub for Asia. Financial Secretary Donald Tsang proposes to increase the duty rate on beer from 30 percent to 40 percent. Financial Secretary Anthony Leung proposes to increase the duty rate on wine from 60 percent to 80 percent. Coalition of alcohol industry actors (HKWSIC) begins to form. Legislator Tommy Cheung requests the government to provide a timeline for the development of wine hub The Financial Services and the Treasury Bureau launches a Public Consultation on the Duty on Alcoholic Beverages. The HKWSIC calls for alcohol tax cut in a media interview The HKWSIC urges the government to lower alcohol duties at press conference The Liberal Party and the Democratic Alliance for the Betterment and Progress of Hong Kong support the alcohol duty reduction The HKWSIC hosts a press conference to advocate the alcohol tax reduction Financial Secretary Henry Tang proposes to reduce the duty rate on beer from 40 percent to 20 percent, and on wine from 80 percent to 40 percent. The HKWSIC submits its proposal on Hong Kong as a wine hub to the Treasury Bureau The HKWSIC hosts a press conference to urge the government to slash alcohol taxes Financial Secretary John Tsang proposes to exempt the duties on wine and beer and all other alcoholic beverages except spirits. Amendment of Dutiable Commodities Ordinance Cap. 109 which provides for suspension of the licensing/permit requirement for import/export, storage, manufacturing and movement of the selected alcoholic liquors. search to include additional terms identified in the docu- ments reviewed. The industry documents offered insight into the alcohol industry’s tactics in its effort to abolish the alcohol tax as well as activities of key individuals and groups that worked closely with the industry. It should be noted that much of the industry information pre- sented in this paper was obtained through a search of official industry documents comprising the alcohol in- dustry’s submissions to various government departments, press releases, web-sites and industry bulletins. In this paper, the alcohol industry refers to multinational alcohol producers and wholesalers as well as retailers (off-sales) and hospitality sectors (on-sales) that sell alcohol pro- ducts within Hong Kong. Media reports were obtained through the LexisNexis database for relevant coverage. Initially, several hundred documents were found but the following categories of documents were regarded as ineligible: (1) excerpts of legislation and other govern- ment documents where alcohol duty rates are simply presented; (2) industry documents where the industry position is not mentioned; and (3) documents with in- formation on other issues in Hong Kong. In total, 198 documents were retrieved. After excluding duplicates (several versions of one document, translations into Eng- lish/Chinese, etc.), 97 documents most relevant to this study were examined in detail. These documents were further indexed by date and topic for a historical and thematic analysis using Nvivo8 software. Results The transformation of the alcohol tax regime In Hong Kong, alcohol duties have been applied on both imports and goods manufactured locally on an ad valorem basis but not levied on exports or re-exports. Throughout the 1990s, the duty rates on alcoholic bev- erages, except wines, remained unchanged: liquor with an alcoholic strength of more than 30 percent was taxed 100 percent while wine and beer were taxed at a rate of 60 percent and 30 percent, respectively. The alcohol tax- ation policies have, however, undergone dramatic trans- formations in the 2000s. In 2001, the Hong Kong government increased the duty rate on liquor with an al- coholic content of 30 percent and below (except wines) from 30 percent to 40 percent [22]. Subsequently, the government raised the duty on wine from 60 percent to 80 percent in 2002 (see Figure 1). One of the main reasons for such a tax increase was the rise in Hong Kong’s budget shortfall, with a consoli- dated deficit of HK$ 65.6 billion (US$ 1 = HK$ 7.80) for 2001–02 as a result of the continuing slump in the prop- erty market and the local economy [22]. In view of the economic downturn, the excise tax represented a more politically viable way of raising revenue for the govern- ment than other taxes such as those on capital gains and income. In his 2001 budget presentation, then-Financial Secretary Donald Tsang (who was appointed Chief Sec- retary in 2001–2005 and subsequently assumed the office