The alcohol industry lobby and Hong Kong’s zero wine and beer tax policy

Whereas taxation on alcohol is becoming an increasingly common practice in many countries as part of overall public health measures, the Hong Kong Special Administrative Region Government is bucking the trend and lowered its duties on wine and beer by 50 percent in 2007. In 2008, Hong Kong removed all duties on alcohol except for spirits. The aim of this paper is to examine the case of Hong Kong with its history of changes in alcohol taxation to explore the factors that have driven such an unprecedented policy evolution.

The research is based on an analysis of primary documents. Searches of official government documents, alcohol-related industry materials and other media reports on alcohol taxation for the period from 2000 to 2008 were systematically carried out using key terms such as “alcohol tax” and “alcohol industry”. Relevant documents (97) were indexed by date and topic to undertake a chronological and thematic analysis using Nvivo8 software.

Our analysis demonstrates that whereas the city’s changing financial circumstances and the Hong Kong Special Administrative Region Government’s strong propensity towards economic liberalism had, in part, contributed to such dramatic transformation, the alcohol industry’s lobbying tactics and influence were clearly the main drivers of the policy decision. The alcohol industry’s lobbying tactics were two-fold. The first was to forge a coalition encompassing a range of catering and trade industries related to alcohol as well as industry-friendly lawmakers so that these like-minded actors could find common ground in pursuing changes to the taxation policy. The second was to deliberately promote a blend of ideas to garner support from the general public and to influence the perception of key policy makers.

Our findings suggest that the success of aggressive industry lobbying coupled with the absence of robust public health advocacy was the main driving force behind the unparalleled abolition of wine and beer duties in Hong Kong. Strong public health alliance and advocacy movement are needed to counteract the industry’s continuing aggressive lobby and promotion of alcoholic beverages.