Yoon and Lam BMC Public Health 2012, 12:717 http://www.biomedcentral.com/1471-2458/12/717 Page 4 of 12 Spirits Beer Wine 120 100 80 ) % ( 60 x a T 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year Figure 1 Alcohol Duty Rates in Hong Kong, 2000–2011. of Chief Executive in 2005–2012) acknowledged that he felt pressured because “Hong Kong must overcome the difficulties spawned by the economic downturn” [23]. As part of effective measures to restore the fiscal balance, he believed that an increase in the duty on beer would be inevitable. He stated that the tax increase would generate additional revenue of HK$ 90 million each year [23]. In the following year, faced with a growing budget shortfall, Financial Secretary Anthony Leung, Tsang’s successor, proposed to increase the duty rate on wine from 60 per- cent to 80 percent, which he claimed would produce an additional HK$ 70 million in revenue [22]. The increase in alcohol taxation was met with imme- diate opposition from the alcohol industry. From the al- cohol industry’s perspective, the tax represented a direct menace to their continued prosperity. The Hong Kong Beer Industry Coalition (HKBIC), which then comprised seven international brewers and importers, strongly opposed the tax increase on beer. In May 2001, the HKBIC claimed that “such an increase would adversely affect the livelihood of several hundred thousand people working in the beer, retail and catering industries [24]”. More importantly, in order to gain wider public support, they highlighted that the tax increase might significantly push up retail prices, which would eventually penalize the majority of ordinary beer drinkers [25]. The HKBIC’s attempt to rally the general public against the tax in- crease was well reflected in their public statement: “The HKBIC does not believe that it is fair to impose a duty rate increase, which affects a broad spectrum of ordinary consumers, while the duty rates on luxury products remain unchanged [24].” Likewise, the local wine industry fiercely opposed the duty increase and urged the government to reconsider its proposal. The Hong Kong Wine Industry Coalition (HKWIC), then comprising eleven wine manufacturers, employed a rather similar rhetoric to appeal to the mid- dle class, as they could be construed as a potential sup- porter against government tax-rise legislation. In its letter submitted to the Legislative Council in April 2002, the HKWIC argued that “wine is a staple consumer good enjoyed by a wide range of the population” and therefore such an increase “affects a large cross-section of the population, not a small group of high-income earners [26].” They warned that the government would not receive the planned additional HK$ 70 million in revenue from the alcohol tax increase. Rather, they esti- mated that the tax increase would result in a loss of gov- ernment revenue because there would be general signs of trading-down activities to cheaper priced alcohol [27]. Linking the wine duty with Hong Kong’s competitive- ness vis-à-vis other economies in the region, the SoHo Association Limited representing the catering industry noted that raising the wine duty ran counter to encour- aging investment in Hong Kong [28]. In a separate move, the Australian and New Zealand Consulate- Generals in Hong Kong, the two major suppliers of wine to Hong Kong, sent protest letters to the government. They argued that “consumers will react to the tax in- crease by switching to lower taxed and untaxed bev- erages and to illicit sources of smuggled wine, defeating the aim of substantially raising revenue [29].” Despite the alcohol industry’s vigorous lobbying, the Hong Kong government was initially resistant to the