Wine merchant Berry Brothers & Rudd sets up shop in Hong Kong
Berry Brothers & Rudd is eager to make the most of China's growing taste for fine wines
The growing number of wine lovers in Asia, particularly in China, has led a London-based wine merchant with 324 years of history serving customers in Europe to open its first outlet in Hong Kong.
The St James's Street company, Britain's oldest wines and spirits merchant, said it planned to expand in the region despite sales of high-end wine dropping by 30 per cent from its peak in 2010.
Until it opened its own base in Hong Kong this month, it operated in the city through a local franchisee. It has now opened in Hong Kong under its own name to target mainland and Hong Kong clients.
The company has an office in Wan Chai where clients can taste the wines and it is in the process of identifying a suitable location to open a retail shop.
Simon Berry, chairman of the family-owned business, said the company's shop in London on St James's Street had attracted a growing number of Chinese and Hong Kong customers in recent years, indicating strong demand from the region.
"We see Asia, particularly Hong Kong and mainland China, as being of increasing importance to our business. The business here is growing at the highest rate of any of our regions and we see that trend as continuing," Berry told the when he was in Hong Kong for the opening.
Berry said mainland and Hong Kong customers who visited the London shop not only bought wine for investment or drinking, they also wanted to learn more about wine.
"There is a genuine thirst for knowledge about wine. That is why we decided to establish our own fully owned Berry Brothers & Rudd operation in Hong Kong, as a basis for further investment and to raise the bar even higher on service levels," he said. "It is definitely a sign of our strong commitment to the region."
The company also has operations in Japan and Singapore, but Berry said Hong Kong was an ideal location from which to expand the company's business in Asia because of its proximity to China and other Asian countries.
More importantly, Hong Kong now has no taxes on wine after slashing duties from 80 per cent to 40 per cent in 2007 and then scrapping the tax completely a year later.
The mainland, however, still levies a 40 per cent duty, while overseas markets, such as Britain, the United States and Japan, have taxes ranging from 5 to 20 per cent.
Had the wine duty still applied in Hong Kong, the city would not have been able to develop as a wine trading centre, Berry said.
Investors in fine wine may be smarting from the fall in prices, he said, citing a decline in the price of top-end Bordeaux wines of 30 per cent since their peak in 2010.
But the lower prices meant now was an ideal time to buy, either to drink or as an investment.
"Right now returns are on the way up, and it is a good time to buy," he said. "Burgundy is my tip at the moment as I feel we are about to experience a surge in its popularity."
However, investors should not take short-term bets, he said.
"It is best to look at wine as a long-term investment, with a minimum tenure of five years. It is also very important to carefully ensure that you invest in the right wines at the right time, and that is where Berry Brothers & Rudd can remove a lot of the risk with our advice."
