• Sun
  • Oct 26, 2014
  • Updated: 7:55am

Asian thirst fuels HK wine boom

PUBLISHED : Tuesday, 04 October, 2011, 12:00am
UPDATED : Tuesday, 04 October, 2011, 12:00am
 

The euro-zone sovereign debt crisis may have slashed the value of the Hang Seng Index by a quarter in the past two months, but the investment climate seems to have had little effect on high-end wine sales in the city.

Over the weekend, Sotheby's wine auction sold 95 per cent of all lots and achieved sales of HK$99.1 million, 14.6 per cent more than the estimate for a range of high-end Bordeaux wine, including Krug champagne and some bottles of Chateau Lafite.

Robert Sleigh, head of Sotheby's Asia wine department, told White Collar that Hong Kong's position as a wine auction hub was well established, with higher bids than in London and New York, two other major wine auction centres.

In the first half of this year Sotheby's has held four wine auctions in Hong Kong, drawing HK$250 million and representing 60 per cent of the auctioneer's global sales. Despite all the worries about Europe's debt crisis and the economic malaise in America, Sotheby's international wine sales in the first six months surged by 49 per cent to HK$414 million from a year ago.

Since its first wine sales in Hong Kong in April 2009, the auctioneer has sold 10,964 lots in 17 auctions.

Last year, Sotheby's sold HK$410.42 million worth of wine in the city - 60 per cent of its total wine sales. The firm sold HK$163.6 million of wine in London and HK$114.49 million in New York.

Sleigh said Hong Kong had become a major wine auction centre because many Asian millionaires - including those from the mainland, Indonesia and Japan - were becoming fond of collecting wine not just for investment, but for consumption too. The United States and Europe, which traditionally have more wine collectors, are now seeing more sellers in the market.

Even before Sotheby's began selling wine in Hong Kong in 2009, about 60 per cent of buyers in London and New York were from Asia. Sleigh said Hong Kong was a good location for Asian investors to attend wine auctions because it was close to nearly all the major Asian cities. More importantly, Hong Kong now has no taxes on wine after scrapping them in 2008, after slashing duties on wine from 80 per cent to 40 per cent in 2007.

The mainland, however, still levies a 40 per cent duty, while overseas markets - such as Britain, the US and Japan - have taxes ranging between 5 and 20 per cent.

The abolition 'of wine duty established Hong Kong as a wine auction centre,' Sleigh said

The market outlook in the city was positive as wine has become a lifestyle trend in Asia, Sleigh said.

However, the city's wine market was not sufficiently diverse, he said, as investors seem interested only in the best French wine with an average value of about US$10,000 per case of 12 bottles. That compares with US$2,000 per case in auctions in New York and US$1,000 per case in London. That shows that there is a broader price range in wine auctions in New York and London, and Hong Kong would need to catch up in this aspect.

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