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Hong Kong Still Leads the Asian Wine Scene

August 9, 2017 1:21 pm - Posted by Jody in Eat

Wine culture is swelling on the vine in Hong Kong, with imports and re-exports thriving and giving rise to subsidiary enterprises that cultivate local connoisseurship, as Honey Tsang reports.

After starting with a welcoming glass of sparkling wine, Kevin Davy and his first-time clients were set to embark on a vinous adventure. They sipped and reveled in glasses of wine poured from carefully chosen bottles. Davy, a sommelier-cum-wine educator, paired the drinks immaculately with nibbles.

This is when the camaraderie between a wine educator and his students tends to gel – no notes or chalkboard, just banter. Through convivial conversation, the 28-year-old French national imparted knowledge to his students. However, they were not in a classroom, but a client’s living room.

In recent years, a new type of door-to-door wine education service has sprung up in Hong Kong, offering a fresh way for the city’s wine lovers to understand and better enjoy wines in the comfort of their own homes.

“Most learners are shy. They’re often too intimidated to ask basic questions in front of strangers,” said Davy, who worked as a professional wine educator in the French region of Provence before moving to Hong Kong. “When they learn at home, they are all just friends and are always happy to ask questions.”

This relatively soft approach to teaching people how to appreciate wine works particularly well with wine lovers who plan on exploring more but feel thwarted by the trappings of traditional wine schools.

Davy’s venture, Sommelier at Home – which he set up in Hong Kong in 2014 – has borne fruit. He’s built a broad clientele, ranging from beginners to regular wine consumers, and even oenophiles, a rather fancy term for wine lovers.

He attributes the success of his business to the locals’ zeal for quality wines coupled with a growing thirst for advanced knowledge. He understands that the city’s wine drinkers, at all levels, are now more eager to burnish their knowledge of wine as they strive to become smarter consumers.

Cross-border trade

This smart-drinking attitude in Hong Kong’s wine scene is also trickling across the border and seeping into the soil of the Chinese mainland.

Davy is in great demand among mainland wine buffs. In recent years, he’s been invited by businesses in Beijing, Shanghai and Hangzhou, Zhejiang province, to provide wine-tasting workshops for their staff members.

“These learners aren’t looking for sommelier certificates or diplomas,” he said. “They come to me simply as wine lovers who want to understand what they like and why they like it, so they can buy the right affordable wines that match their own tastes and values.”

With demand for mid-range wines growing, the mainland is forecast to overtake the United Kingdom and France by 2020 to become the world’s second-biggest consumer after the United States. Wine consumption on the mainland is projected to soar to nearly $22 billion by 2020, up 40 percent from $15.5 billion last year, according to estimates from International Wine & Spirits Research.

The rising volume represents a real and growing appetite for the beverage among mainland drinkers, notwithstanding the rising trend of wine being bought as business gifts amid the government’s clampdown on corruption.

Though the majority of mainland drinkers are less wine-savvy than those in Hong Kong, “they are more eager to learn, and they tend to learn faster”, Davy said.

According to Song Haiyan, associate dean of the School of Hotel and Tourism Management at the Hong Kong Polytechnic University who oversees a nascent program called Master of Science in International Wine Management, the mainland’s rising appetite for quality wines has been driven by a growing middle class, most of whom are millennials who rarely pennypinch on lifestyle goods.

Relatively speaking, these mainland millennials are fussier than Generation X. They’re better adapted to global wine trends, and, unlike their parents’ generation, aren’t content with mediocre wines, he said.

Surprise vintages

In addition to providing courses about basic wine knowledge and drinking etiquette, Davy also offers a personalized sommelier service. His duties include bringing in superb bottles from famous vineyards that will complement the food his clients prepare at home.

He said he is astonished at how wine-savvy his clients are. “Many wine enthusiasts in Hong Kong are accustomed to the taste of high-priced wines,” he said. “They always ask me to surprise them with bottles that are underrated, but taste divine.”

Last year, nearly 63 million liters of wine poured into Hong Kong, amounting to HK$12 billion ($1.5 billion), far outstripping the HK$1.62 billion imported in 2007.

Most of the wine Hong Kong imports comes from France. In March, French wines accounted for 62.4 percent of the city’s wine imports, and were valued at HK$619 million. Australia took second place, earning HK$181 million, with about 18 percent of the market.

Hong Kong’s wine exports have also been expanding exponentially. Since the authorities scrapped customs duties and administrative controls for wine in 2008 in a bid to propel Hong Kong toward becoming Asia’s wine hub, the city has pulled in sizable profits, mostly through re-exporting bottles to the Chinese mainland. Re-exporting involves exporting previously imported goods in an untouched state.

Cross-border wine trade leads the market. In March, figures calculated by the city’s Commerce and Economic Development Bureau showed that Hong Kong pocketed around HK$355 million through re-exports of wine to the mainland. That was equivalent to 76.5 percent of the city’s total wine re-export receipts for the month. Destinations such as Macao, (13 percent) and Vietnam (6 percent) came next.

The close ties in the cross-border wine trade are the result of years of cooperation between the Hong Kong authorities and the central government.

In the past decade, a number of incentives have been introduced to facilitate the cross-border wine trade for industry players, including the reduction of red tape for re-exports to mainland ports, and zero-tariff status for Hong Kong-produced wines entering the mainland under the Closer Economic Partnership Arrangement.

Greater vibrancy

Altaya Group is a boutique shop that has been offering people in Hong Kong a wide selection of top-flight wines since 2001. Its founder Paulo Pong Kin-yee, a seasoned wine merchant, said the dynamics of the city’s wine scene, especially the fine-wine sector, have become more vibrant over the past two decades.

“You won’t see another city like Hong Kong, which has a population of about 7 million but abounds with wine enthusiasts with an overwhelming focus on premium wines,” said Pong, who is known locally as the “Wine King” in recognition of his endeavors in leading the city’s fine-wine industry.

For almost a decade, Hong Kong’s fine-wine industry has been characterized by outstanding merchants and authenticators who have a strong global network of acclaimed winemakers and help bring in a high-value selection of genuine class-A wines from across the world.

This forte is valued by mainland and overseas collectors, who visit Hong Kong in search of investor-grade bottles. Chateau Lafite, from Bordeaux, Domaine de la Romanee-Conti and other Burgundies are always the most sought-after vintages, according to Pong.

In 2014, the Sotheby’s wine auction in Hong Kong set a world record by selling the most expensive wine lot (114 bottles of Romanee-Conti) for HK$12,556,250 – which works out at HK$110,143 per bottle or HK$13,768 per glass.

This trend is becoming more common, especially after a large number of counterfeit bottles were discovered at international auctions some years ago, eating away at the global fine wine market. One of the biggest scams was pulled off by Rudy Kurniawan, who sold fake wines at auction and defrauded buyers out of millions of dollars. Kumiawan was jailed for 10 years by a court in the United States in 2014.

According to Pong, importing bottles directly from winemakers is the best approach to ensure that no bogus beverages can slip into the supply chain. Pong’s company is the exclusive agent for about 90 internationally lauded brands from Bordeaux, Burgundy, the US and elsewhere.

A new dream

Davy has always been a very active in the field of wine education, and now he has a new plan. He is preparing to crack a new market – the 40-to-50-something domestic drinker.

He believes that many people in Hong Kong have a misconception that wine is a trapping of high society. He has been pleased to see that some locals are trying to adapt to drinking wine, and he has noted that middle-aged men love to order wines in restaurants to liven up an evening.

“While this group is already embracing wine, I really want them to have better wines. I want to guide them to grasp the basic concept of pairing wine with Chinese dishes.”

He is mapping out a new project that will offer rookies a case of basic wines complete with explanatory notes. The wines will prompt them to acquire more knowledge.

Davy wants to achieve a trickle-down effect, first by reaching out to the city’s established wine lovers, then by moving on to beginners in a bid to help people in Hong Kong to drink smarter.

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