Henry Lum Kai-cheung, 41, general manager of Cheers, a boutique wine and cocktail store that operates both in Hong Kong and on the mainland, said the lacklustre retail performance and slowdown of tourism in the city had not deterred him from setting up a stall this year.

"Actually 90 per cent of my business in the festival in the past years has been from local residents," Lum said.

"Tourists don't usually buy many bottles here because they would have to carry them back home."

Jamie Lo Ching-man, marketing manager of Kiwa, a company that imports spirits from Japan, had similar views.

"Most of our customers are Hong Kong locals. In fact, this year, we doubled the number of booths in the festival from five to 10 because I think there is huge demand for our wine in the community," said Lo.

He was expecting an 80 per cent increase in sales from last year.

According to Lo, the impact of the economic slowdown is not easily evident from the festival itself because many wine companies in Hong Kong thrive by supplying their products to restaurants in the city.

"We now have fewer orders from restaurants and business has dropped 20 per cent in that area starting from the middle of this year," Lo said.

The festival, which runs for four days till 10pm on Sunday, attracted over 140,000 visitors last year when it was relocated to Kai Tak due to the Occupy protests in nearby Admiralty.

Despite the withdrawal of 40 exhibitors last year, Lum still had fond memories of his stall's performance, which greatly surprised him.

"There was an initial worry, but it ended up becoming a huge success because the organiser waived the admission fee and this attracted many people," Lum said.

"If I can reach the same sales volume this year, I'll be happy."