The many food safety and food quality scares in recent years on the Chinese mainland have undermined consumer confidence in locally produced food and provide an opportunity for more imported certified organic foods and beverages. Where possible, mainland consumers’ first choice in food and beverages is imported products in original packing, followed by foreign brands produced on the mainland.
Hong Kong has a strong reputation as a gateway into the People’s Republic of China and other parts of North Asia. In 2012, Hong Kong imported HK$18 billion dollars of food and beverage products from around the world, while HK$12 billion of this was re-distributed into China.
The Hong Kong Trade Development Council (HKTDC) in Sydney says the advantages or benefits of using Hong Kong as a gateway to China include a dynamic workforce that speaks English, strong business fundamentals, along with the intellectual property rights (IPR) protection Hong Kong offers.
While China has a 15% withholding tax, in Hong Kong it is 5%. It also has a low and simple tax system and common legal system. Hong Kong laws are forcible on mainland China.
Many retailers, global FMCG brands, and organic food and cosmetic companies from around the world are using Hong Kong for their North Asia base to market to China, Japan and Korea.
Kerry Logistics (Hong Kong) Limited operates an integrated logistics business on the island and is a leading logistics provider in Asia with extensive operation across greater China and countries in the region.
Kerry Logistics’ Australian and New Zealand director Mr Alan Yip says that the company can assist exporters to ship from Hong Kong to other Asian countries, while HK has mostly lower port and general warehouse charges overall and no shipping tax or customs duty.
“Doing business in Hong Kong offers, efficient, regulated business services and free foreign exchange control,” he says. “Kerry Logistics has over 6,000 trucks servicing China and 12 main warehouses in the mainland.”
Dah Chong Hong Holdings Ltd (DCHH) boasts a large trading network in China and Hong Kong and is a third party logistics specialist in food and beverages, household products and repacking operations in Hong Kong and mainland China.
Corporate director Mr David Kuk has many years of experience in China and Hong Kong and says HK offers easier access to showcase major FMCG international brands and a good testing point for F&B products. DCHH distributes to supermarket chains and groups such as Dairy Farm/Wellcome, Walmart, Carrefour, Tesco and major Chinese supermarket chains.
“We also have 10 distribution centres in Chinese cites, and provide ambient and multi-temperature storage to bring the overall cost down,” he says.
Some established Hong Kong logistics companies also carry out the processing of food exported by foreign countries to the mainland, such as re-labelling, sorting and re-packaging and provide support services ranging from customs declaration, commodity inspection, warehousing and delivery.
However, some certified organic suppliers have found that locating the supermarkets and organic stores they may wish to deal with and a reliable importer has worked.