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The vice-president of finance at Seagram Greater China was contemplating what actions to take in light of the proposed changes to the duty rates which applied to imported scotch and cognac in Taiwan. Given that the Taiwanese spirits market had become very competitive in recent years, careful management of the duty rate changes was critical for ensuring future market share and profitability in Taiwan. The task facing the decision maker was to determine what pricing levels to recommend for Seagram''s scotch and cognac products based upon the proposed duty regime. The case is particularly suitable to managerial accounting classes intending to develop skills and application of contribution and margin analysis.The strong marketing linkages in the case also make it applicable to classes dealing with pricing in highly competitive markets. There is a simplified Chinese version available ''9A98BC15''.