China to cut duty on Scotch by half

Four years after delivering a heavy blow to the world’s spirit producers, the Chinese government is giving them a leg up on Friday.

The tariff on vermouth and similar products will be slashed from 65% to 14% while duty on all whiskies falls from 10% to 5%

Beijing’s crackdown on corruption and lavish entertainment by civil servants caused turmoil as the market for spirits, especially Cognac and Scotch nosedived. Since then producers have been restructuring their ranges and adjusting to new conditions.

Only in recent months have Cognac producers again begun to talk positively about the Chinese market, although all spirit producers have never ceased to target the long-term potential from the world’s biggest nation.

But now Beijing’s Ministry of Finance has announced wide ranging tariff cuts in the hope of assisting consumers to access quality and speciality products, not produced lines.

As the economy swells, the burgeoning middle class demand foreign brands and the move is partially an attempt to encourage them to spend more at home rather than taking overseas trips in pursuit of quality and kudos.

Tariffs on 187 product categories are being cut from 17.3% to 7% but the biggest cuts are on imported alcohol. The tariff on vermouth and similar products is slashed from 65% to 14% while duty on all whiskies falls from 10% to 5%.

A spokesman for Diageo, the biggest producer of Scotch, was quoted by Bloomberg as welcoming the tariff cuts as it will increase the market for whisky.

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