NEWS
CHANGYU CHAIRMAN LOBBIED BEIJING TO CUT TAX TO HELP DOMESTIC WINE PRODUCERS
By Tony Zhu
5-3-2021
Credit: David 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 are facing ever-increasing production costs and fierce competition from imported wines.
Currently attending the annual National People’s Congress meeting in Beijing, Zhou hoped that the central government can cut consumption tax and VAT for domestic wines, or allow the wine industry to enjoy the same tax scheme as agricultural industry.
China currently levies 10 percent consumption tax and 13 percent VAT on domestic wines. Zhou said these tax bills are higher than their peers in most wine producing countries that often also receive agricultural subsidies from their governments.
He said among the 130 wine producers surveyed by statistics bureau, 40 are making a loss, and Changyu is the only company with a profit over RMB 1 million.
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.
Market share of domestic wines continue to decline, while that of imported wines continue to rise reaching 60 percent last year compared to 32 percent in 2015.
According to data from the national statistics authority, revenue for China’s domestic wine industry was RMB44.6 billion (USD6.37bn) in 2012, but in 2018 total revenue dropped substantially to RMB28.8bn (USD4.11bn).
It’s common practice in China for local officials to lobby for policies deemed desirable for their local areas during the annual meetings of the CCPCC and the Chinese People’s Congress.
Their proposals will be registered and will possibly be discussed by the delegates attending the annual meeting. Some of these proposals would become policies if found fit by the central authority.
(the writer can be contacted at: info@thewinechronicle.com)
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