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Wine and Spirits
Opinion
David Dodwell
David Dodwell

Outside In | Hong Kong a real star for the battered global wine industry – at least for now

  • Hong Kong has been awash in wine in recent weeks, but the city is an outlier as the wine industry deals with climate change’s effects and shifting tastes
  • Warmer weather is weighing on global production, and demand is slipping as Generation Z is increasingly averse to alcohol and other risky behaviours

Reading Time:4 minutes
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A woman takes a photo of her glass of wine at the Hong Kong Wine and Dine Festival at the Central harbourfront on October 26. Winemakers are facing pressure on multiple fronts with climate change reducing crop yields and changing tastes among young people driving down consumption. Photo: Dickson Lee
David Dodwell
For many in Hong Kong, these past couple of weeks have been awash with wine – ranging from the massive waterfront Wine and Dine Festival and coupons to incentivise visitors to indulge in Hong Kong’s bars and restaurants to this weekend’s Hong Kong International Wine and Spirits Fair and Australian Prime Minister Anthony Albanese’s mission to Beijing to (among other things) restore Australian wine exports to China.

But behind this upbeat narrative is a more challenging story. In short, the US$330 billion global wine industry is battling powerful headwinds both in terms of climate change’s effects on production and faltering global demand for wine. Sales volume in 2022 fell 3 per cent, according to Wine Australia.

At the heart of this narrative is a debate over whether young people aged 28 and under – also known as Generation Z – are turning their backs on alcohol, and wine in particular. As a BBC article put it, “a youth culture that has de-normalised drinking is flourishing – and the change is being felt”. Not that you would have noticed it on Hong Kong’s Wan Chai waterfront during the Wine and Dine Festival last week.
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The Gen Z challenge in the world’s biggest wine-consuming countries – including the United States, France, Italy, Germany and Britain – comes at a difficult moment for the world’s winemakers, now facing turbulence in both supply and demand.

Australia’s wine producers, under the influence of a third successive La Nina year in 2022, have wrestled with the wettest and coolest growing season since 2011, with the 2023 winegrape crush at its lowest since 2000.
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Even with record-low production, a crash in global demand for their cheaper commercial wines has left winemakers with an estimated surplus of 2.8 billion bottles. That is enough to fill 859 Olympic-sized swimming pools.

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