CHAIRMAN OF CHANGYU WINERY CALLS ON BEIJING TO CUT TAX ON DOMESTIC WINES
By Tony Zhu
Credit: Siulan Law Mathews
Chairman of China’s leading winery Changyu Pioneer, Zhou Hongjiang, has called on Beijing to cut tax for domestic wines to help China’s wine producers who have been hit hard by the coronavirus crisis and competition from imported wines.
Currently attending the annual National People’s Congress meeting in Beijing, Zhou said that China’s wine producers are facing tax bills higher than their peers in most wine producing countries.
He said many of his peers in Europe and beyond are receiving agricultural subsidies from their governments. However, Chinese wine producers do not enjoy agricultural subsidies, but have to cope with ever-increasing production costs.
In many cases, Zhou said, the production costs of domestic wines are higher than the prices of imported wines, making Chinese domestic wines very uncompetitive.
China currently levies 10% consumption tax and 13% VAT on domestic wines.
The coronavirus crisis has added pressure on the industry. With restaurants and bars shut before and after Chinese new year, wine sales nose dived and distributors are still working through the stock piles.
He said Changyu’s distributors are strengthening their online platforms while recruiting community partners to help raise sales volume.
Zhou called on the central government to cut consumption tax and VAT to help domestic wine producers to get through this difficult time.
China’s domestic wine industry has been in continuous decline since 2012. According to data from the national statistics authority, revenue for the industry was RMB44.6 billion (USD6.37b) in 2012, but in 2018 total revenue dropped substantially to RMB28.8b (USD4.11b).
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