Wine continues to flow in Hong Kong despite economic downturn, festival exhibitors say
Consumers defy city’s retail woes to show strong appetite for wine and liquor
Consumers are defying the city’s retail woes to show a strong appetite for wine and liquor, according to sellers at the city’s largest ever Wine and Dine Festival on Friday.
The event, which popped open on Thursday and will end on Sunday, has seen Hongkongers flock to the Central harbourfront after knocking off work and exhibitors report steady growth in their business.
Analysts say alcohol historically has held up well in weaker economic times, as gloomy employees keep drinking in the face of an uncertain outlook – though they might settle for cheaper brands and drink at home instead of while dining out.
“People will tighten their belt by reducing their discretionary spending, which includes things like clothes and big ticket items, but they tend to maintain spending on food and drink although they may trade down in terms of brands and price,” said Jon Copestake, chief retail and consumer goods analyst at the Economist Intelligence Unit.
The wine trade in the city has been thriving despite the steepest retail downturn since 1999 and sluggish economic growth.
According to the Census and Statistics Department, wine exports grew 38 per cent in the first seven months of this year in terms of value, while imports increased 24.2 per cent. The strongest growth has come from the mainland, where wine imports from Hong Kong jumped 50.5 per cent during the same period.
Allan Sichel, president of Le Conseil Interprofessionnel du Vin de Bordeaux, which represents about 10,000 French wine producers, said mid-level-priced wines – between HK$200 and HK$600 – had delivered the strongest growth in Hong Kong over the past two years.
“There is a tendency to keep drinking in times of economic uncertainty – partly to alleviate the stress and pressure of that uncertainty. People drink when they are happy and people drink when they are sad,” Copestake said.
For Hong Kong traders, the strong local currency, which is pegged to the US dollar, has made it relatively cheaper to import wines from regions such as Europe and Australia, he added.
The market for prestige wines has also been holding up.
Alexander Nardin, director at Croatian wine maker AMAI International, said 12 of its 18 bottles of prestige wine priced at HK$8000 – one of the most expensive at the festival – had sold on the first day of the event.
“Buyers came to my booth and asked for the wine specifically,” he said, adding that the festival was the only place in Hong Kong people could buy it.
Copestake said the phenomenon was probably because prestige wines were seen as a safe investment for speculators during times of economic uncertainty.
Tourism Board executive director Anthony Lau Chun-hon said he expected the four-day event to attract 150,000 visitors.