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The cost of this proposal would be $12 million in 1997/98 and $103 million up to 2000/01, he said.

The proposal will come into effect on April 1 this year.

End

Duty on alcoholic beverages to be reduced

The duty on wine will be reduced from 90 per cent to 60 per cent, the Financial Secretary, Mr Donald Tsang, told the Legislative Council today (Wednesday).

This will cost $110 million in 1997/98 and $490 million up to 2000/01.

He explained that the case had been put to him that the 90 per cent duty on wine was too high and was affecting Hong Kong's tourist industry and business generally,

said.

"For this reason. I propose to reduce the wine duty from 90 to 60 per cent." he

"I am looking to shops, restaurants and hotels to pass on this duty reduction to their consumers. I shall ask the Consumer Council to monitor the price of wine in restaurants, hotels and other retail outlets to see that they do so."

Mr Tsang reiterated that in March 1994, a simple ad valorem duty system on alcoholic beverages was introduced. The system had benefited ordinary consumers by giving them greater choice and cheaper alcohol as importers had to compete for sales, especially at the lower end of the market.

"And it is also consistent with our obligations under international trade rules that we should treat local and imported products exactly the same. Thus, there is no valid argument for me to change the system.

"As the French proverb says, and as those of you who enjoy a glass of wine from time to time will know, it is only the first bottle which seems expensive. Once that has taken effect, so I understand, drinkers worry less about the price.