Flowing wine may very well be a metaphor for the increasing flow of trade between Hong Kong and the mainland. Tiffany Wong uncorks the observations of wine market experts against the backdrop of recent and future wine market trends
Wine is clearly a symbol of luxury in Hong Kong. As a city filled with fast-paced glamor, parties and foreign business activity, it is a hub whose international trade has often been at the heart of Hong Kong's approach to luxury goods that is now influencing a similar market, albeit a much larger one, on the mainland.
Robert Cooper, Director of the Enoteca Group, alongside his wife and business partner, Kim Minards, operates three wine-bar restaurants for local and expat professionals in SoHo in Central, Hong Kong Island. In his recent interview with China Daily, he strongly emphasized that Hong Kong is already leading the industry: "The hub is already here and driving big wine-culture growth in China."
He believes that "Hong Kong is a leading international trade center and financial capital (which) means it generates a large cosmopolitan, professionally educated population that demands and can afford a better product," while predicting that Shanghai's economic growth will also make it the next center in the mainland wine market. "Hong Kong is ideally set up to be used as a springboard for world wineries to access the sleeping giant," he said, adding, in the spirit of the memorable remark in the baseball movie, Field of Dreams, "if you build it, they will come."
Paulo Kin Yee Pong's business caters to private and corporate customers. As managing director of Altaya Wines, he explains that "China's wine culture is developing fast and furious." Hong Kong's proximity and history with wine consumption undoubtedly influence the mainland market by providing a greater variety of wines to customers.
Many new wine drinkers choose New World wines that are more "fruit-driven" in style and that can be consumed with or without food, Many proprietors indicate that wines of New Zealand, California and Tuscany are rapidly chasing the top ranks on their wine lists. These entrepreneurs have already been building Hong Kong's wine-trading industry that is now moving into the mainland market, although the international wine culture on the mainland is still a work in progress.
According to Gregory De'Eb, Founder and General Manager of Crown Wine Cellars, "Mainland collectors are also becoming increasingly knowledgeable and active internationally. Instead of being laughed at for 'ridiculous' antics such as mixing wine and coke, as was the case a few years ago; we are now being taken seriously by the world."
His company, which stores wine on behalf of collectors and famous wine companies, was founded ten years ago when he converted old military underground bunkers into wine cellars. As a former diplomat, he started from having "very little formal wine knowledge before starting the company" to realizing that the region has "the most exciting collectors and perhaps soon will be the biggest wine market in the world."
He and his fellow local and expat wine entrepreneurs are optimistic about future growth in the industry flowing from cross-border trade abroad into Hong Kong and finally into the mainland.
Another factor in the ongoing wine surge is the elimination of the wine tax in Hong Kong, which hovered around 80 percent in 2007, until its elimination in February 2008. Since then, the wine trade has burgeoned in the region to become the second-largest wine auction centre in the world according to the Hong Kong SAR Government.
"Revocation of the wine tax has completely changed the wine market," said Pong. Despite the recent economic downturn, he said, "We have been able to recuperate" thanks to the elimination of the wine tax in addition to "an increased number of interested and excited wine drinkers from both markets."
As one of the first companies to set up offices in Hong Kong, on the mainland and in Macao, Patricio de la Fuente Saez, managing director of Links Concept, a family-owned distributor, claims that his business has increased 20 per cent since 2008, with no signs of slowing.
Cooper reported a similar experience: "Since the drop of all duty taxes the number of suppliers has grown exponentially...we are spoiled for choice" as a greater variety of wines has been imported into Hong Kong since then.
In order to remain successful, de la Fuente Saez said that "wine not only has to be of great quality, but also has to be reasonably priced." Moreover, the wines must have clear packaging that caters to clients ranging from hotels, bars, restaurants, retails shops, supermarkets and wine-tasting events to banks and law firms. There has also been a cultural shift in that "people in Hong Kong have a big passion for food and (now) a big passion for wine."
"Sell what people want," he advised. "I used to import all kinds of interesting wines from India, Thailand, and Mexico. Although these wines were great, we couldn't sell them as the market was still quite conservative."
There are some mainland-produced wines, said De'Eb. However, like New World wines, when faced with long traditions in Old World wine regions, "China faces the same uphill battle," observed.These wine companies are nonetheless pleased with the direction in which the wine is flowing. "The Hong Kong SAR Government's recent wine promotions and festivities will certainly have gone some way towards introducing wine to more diverse consumers," said Cooper.
De la Fuente Saez believes that "it's important that China implement some strong wine regulations and implements them very actively." For instance, he said, "At the moment a lot of Chinese wines are blended with wines from Chile and Argentina, which is fine, but if it's more than 20 percent then I think it should be mentioned on the label.
There are measures being implemented to ensure that trade flows freely between Hong Kong and the mainland. The Financial Secretary recently announced that Hong Kong's government has signed an agreement with mainland Customs that will provide facilitation measures for wines exported from Hong Kong to the mainland.
He suggested that in addition to a cultural preference for red wine as a lucky color with added health benefits, there may be greater exploration of wine connoisseurship. Moreover, and sounding a very positive final note, he said, "Hong Kong has easy access to all the wines in the world and China has easy access to millions of customers. If Hong Kong and the mainland can work together the sky is the limit."
Source: China Daily / By Tiffany Wong (HK Edition)