June 18, 2012

Recent Auction Trends Could Signal Shift In China Wine Market

Could 2012 Be White Wine’s Year In China?

Though wine consumption is growing rapidly in China, the industry has a long way to go

Coming in the wake of successful wine sales this spring by the likes of Sotheby’s, Bonhams, Acker Merrall & Condit, this past weekend Christie’s Hong Kong held its “Fine and Rare Wines: Featuring an Important European Cellar” auction, a wide-ranging sale that served to test local collectors’ appetites for a broader mix of regions. Reflecting the continuing demand for fine wines that has allowed Hong Kong to hold its status as the world’s largest wine auction market, the auction pulled in a total of HK$16.8 million (US$2.2 million) and, perhaps more importantly, was 93 percent sold by lot and 92 percent sold by value. While not as impressive as the auction house’s sell-out HK$20.3 million ($2.6 million) sale last month, it was markedly better than the Lafite-heavy fall 2011 auction series at which Christie’s sold only 84 percent of lots.

But we’ve become accustomed to seeing successful wine auctions in Hong Kong. What really makes this weekend’s auction noteworthy is the diversity of lots on offer, and the stronger bidding for wines not usually associated with label-conscious Chinese collectors. Commenting on the auction, Charles Curtis MW, Head of Wine for Christie’s Asia, said, “Confirming recent trends, there was competitive bidding for Burgundy, for white wine and for Bordeaux’s “Super Second” growths, and ever stronger results for Italian and Napa Valley wine. Buyers eagerly snapped up both older vintages and large format bottles, again showing that collections here are broadening.”

This is an important development. For years, the wine markets in Hong Kong and mainland China have been defined by their almost singular focus on red wines, particularly those in the Bordeaux mold. But collector and drinker tastes in Hong Kong are shifting, first from Lafite to other Bordeaux like Pétrus and Latour, then to Burgundy and now towards Bordeaux “Super Seconds” and Italian and Californian wine. As we have seen over the past three years, where Hong Kong’s wine market goes, mainland China’s is soon to follow — and now that China is the world’s seventh-largest wine market, this means winemakers can’t ignore the trend.

Indeed, auction houses are paying attention to the broadening demand for white wine, and non-French wine, in the Greater China region. As Simon Tam, Head of wine for Christie’s China, said this weekend, “Our June 16 sale shows that wine knowledge in Greater China is growing rapidly. Burgundy, particularly DRC are clear favorites at the moment.  We see that not only buyers from Beijing are becoming increasingly sophisticated, but rather wine knowledge and appreciation are also permeating into China’s second tier cities, reflecting the increasingly diverse origins of our Chinese bidders.”

Good as gold: Chateau d'Yquem

Of all the wine segments, white wine is certainly the most interesting from our perspective. While Hong Kong observers have expected demand for white wine to grow steadily, as many pair well with Cantonese cuisine, it hasn’t really taken off as an auction segment. (with the exception of the priciest whites, such as Chateau d’Yquem, which have occasionally gained popularity among Chinese drinkers.)

Still, as Tam of Christie’s pointed out, Domaine de la Romanée-Conti remains king in the Hong Kong (and by extension, Greater China) wine auction market. DRC accounted for half of the top 10 lots sold this past weekend, while perennial favorite Pétrus made up three spots, Lafite one and Château Latour one. Though tastes, buying habits, knowledge and interest may be broadening, the highest end of the market is still dominated by “the big names.”

Auction / Food, Wine, & Spirits / Lifestyle
Tag: bordeaux, burgundy, christie's, DRC... , More
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