Red-Hot Market Accounted For 57% Of Sotheby’s Wine Sales In ’09; Demand Expected To Slow Down In 2010 But Maintain Steady Growth
As 2009 nears its end, it’s helpful to look at one of the major trends that reshaped the wine market over the past year (some would say past 18 months) and reoriented the wine industry’s collective focus eastward: the staggering growth in demand for wine in Hong Kong and, by extension, the Chinese mainland. As we’ve written before, though wine is certainly not new to Hong Kong, the floodgates opened, so to speak, since the Hong Kong government lifted tariffs on wine in 2008, making the market far more accessible for vineyards (and auction houses) from around the world.
In conjunction with the lifting of tariffs came a significant increase in the frequency of wine auctions held by Christie’s and Sotheby’s in the past year, occurring alongside — in many cases — auctions of other items that have soared in popularity among Hong Kong and mainland Chinese collectors in recent years: watches, contemporary art and antiques (mainly from China), and jewelry. According to a recent Bloomberg article, the past 18 months or so have been something of a “perfect storm” for wine producers looking to crack the high-potential but as-yet-barely-scratched Chinese market while also catering to sophisticated Hong Kong wine enthusiasts and collectors:
Sotheby’s London auction includes more than 80 lots with bottles of Chateau Lafite, Asia’s favorite Bordeaux. Dates range from 1934 to 2004. A case of 12 bottles of the chateau’s highly rated 1934 vintage is expected to fetch between 5,000 pounds and 6,000 pounds. Three cases of Lafite 2000 are valued at as much as 15,000 pounds each, as are three cases of Chateau Latour ‘82.
“There are various stories about why Lafite is so popular in Asia,” said Mould. “It came top in the original 1855 classification of Bordeaux wines. I also heard at a dinner in Hong Kong that Lafite is popular in China because the name is easy to pronounce.”
Demand from Asia has increased since the Hong Kong government scrapped import duty on wine in February 2008. Prior to February 2007 (when the rate was reduced to 40 percent), the duty had been 80 percent.
“Hong Kong has been the hub of fine wine auctions in 2009,” said Elswood after Christie’s achieved a mid-estimate total of HK$40 million at its Nov. 28 sale. The total was 27 percent higher than Christie’s achieved last November. Twenty percent of 376 lots failed to sell, mostly Burgundy domaines little known in Asia. “There have been 30 wine auctions in Hong Kong this year. It’s been such a headlong rush. I expect there to be a slowdown in 2010.”
While we’ll have to wait and see if there is a “slowdown in 2010,” 2009 has certainly been an interesting year for wine producers and auction houses exporting to or operating in Hong Kong. As the following video from the Hong Kong International Wine & Spirits Fair (previously), which was held in November, shows, vintners from virtually every major wine-producing country are banking on the continued growth in popularity of wine throughout the Greater China region, if not Asia as a whole.
No matter whether the market slows or heats up further next year, it’s a region that can’t be ignored. As Thierry Desseauve, CEO of French vintners Bettane & Desseauve, says in the clip, “We are sure that Asia and China — and Hong Kong, are the market of tomorrow.”