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james suckling uncorked

The Fine Wine Capital of the World?


Posted: Jun 1, 2009 11:01am ET

I received an e-mail today from Acker Merrall & Condit, the New York-based wine merchant and auctioneer, and it reported that its second wine auction in Hong Kong totaled about about $4.8 million. Over 1,100 lots of wines were sold at this past weekend’s sale in Hong Kong, including 2,000 bottles of Bordeaux, 3,000 bottles of Burgundy and 1,200 bottles of the world’s finest Champagne. A Hong Kong wine collector paid slightly more than $68,000 for six bottles of 1985 Henri Jayer Richebourg, the legendary Burgundy.

I have to think that the fine wine capital is now the Far East trade center. I remember about 15 years ago when I wrote that New York could be the new fine wine center after London wine auction houses opened sales there. But it now is moving again, from the Big Apple to the Pearl of the Orient.

You don’t believe me? I hear that many wine collectors—particularly those in the United States—now insist that their wines be sold in Hong Kong. They know that the Chinese, both mainland and Hong Kong, will pay premiums for their wines, sometimes two or three times more than what bidders would pay in New York or London. Some wine auction houses openly say that they would be in the red if it weren’t for their sales in Hong Kong. Most top fine wine brokers in the world now have offices there.

If you combine this with the abolishment of taxes on wine imported into Hong Kong and Macau, you have a rich and vibrant market for the best wines in the world. Moreover, many of the wine auction bidders, according to my sources on the islands, see the events as a way to show their financial prowess still in a global recession. "They like to show that they can pay top dollar for certain wines and then serve them to people," said one Hong Kong wine collector, who will remain nameless.

People can make jokes about the Hong Kong and the Chinese who drink Lafite with Pepsi on the rocks, but it just isn’t like that. I have been going there regularly for years and some of the greatest tastings in my life have happened there. Moreover, I can’t think of a higher concentration of ultrahigh-end collectors who are better educated on the best wines of the world. Of course, there are silly people who pay stupid prices for trophy wines there, not to mention fakes. And there are even more who don’t treat or drink the great wines of the world properly. But Hong Kong is certainly a fine wine market to reckon with.

Jeffrey Ghi
New York —  June 1, 2009 12:32pm ET
Let's the facts be straightened! It was in Beijing and the fizzy drink was Coke!!! =)
Johnny Espinoza Esquivel
June 1, 2009 1:53pm ET
Reading between lines, it is interesting to know how things change. This time, the world recession is affecting former markets for the best world wines and how they move to other wealthier wallets! And somehow, I'm glad it's this way, because it's helping the business keep going. Even though I haven't taste best burgundies or Bordeaux, I can not imagine how would it be not to have Romanee Conti, Montrachet or Ausone or Petrus due to economic crisis.
Mark Antonio
Tokyo —  June 1, 2009 8:21pm ET
No James. Fine wine auction center maybe, but HK just doesn't have enough of wine friendly restaurants, and the climate is not very amenable to storage. Also there are relatively few decent wine shops. Really this is about the auction phenomenon and recent erradication of wine duties and that's as far as it goes.
Michael
Beijing —  June 1, 2009 10:55pm ET
Hi James:I've had the first hand experience why some drink pepsi+red wine here. I was there on a business trip, and was apalled when someone gave me a class of the mixed fiz. I politely declined and asked for a "pure" glass of wine. The next thing I know, I was compelled to "bottoms-up" the glass according to local traditions. Immediately after I wanted pepsi in my wine if I am to Bottoms up every time!The true reason for HK being a wine center is for the mainland market, where taxes are still 45-60% on wine imports. Most mainland collectors buy from UK or US merchants, ship them to their HK office free of duties, and then hand carry them back on business trips. The limit is 2 bottles/trip but no one really checks.
Thomas Bohrer
Hong Kong —  June 2, 2009 3:36am ET
Jeffrey and Michael, you both got it wrong..We are mixing our Cheval Blanc 1947 and Mouton 1982 with Seven Up NOT Coca Cola!!!And yes., we do have Electricity here in Hong Kong.Mark, Berry Brothers...Ponti...Watsons....Enotecca from Japan..and dozens of small Fine Wine Shops are not decent wine shops???And Crown Wine Cellar has just overtaken most Winestorage Centers around the world in terms of capacity.
Mark Antonio
Tokyo —  June 2, 2009 6:50am ET
Heh I'm not saying it's bad! You can keep Enoteca though, shocking prices. Otherwise, sounds like it may be time for another visit.
David Harper
Annapolis MD —  June 2, 2009 7:13am ET
Wealthy wine and whatever drinkers in HK make it tough for the rest of us to secure good wines at good prices. I'm reminded on my days in Bangkok in the 80s when Johnny Walker Black was lining the table. It was for prestige and led to a lot of sloppy drunks. Tell me this has not also become a HK habit, or don't. There may be discriminating collectors in HK who generously share their wines with you, but this is not why most of them buy and slurp what they do.
Jeffrey Ghi
New York —  June 2, 2009 2:54pm ET
I was shocked at the selection at watson's in hong kong tho especially since I thought watson's was a beauty retailer! What I still don't get about HK tho, is that people drink fine wine while smoking cigarettes, but then again the french have done it for years so c'est la vie.
Dominic M Dela Rosa
NJ —  June 2, 2009 3:12pm ET
HK can buy all the First Growths and cult wines that they want. I'm perfectly content with the $50 wines that are in my local wine shops. I'm not convinced that one shouldn't worry about storage conditions in HK. One good typhoon to hit the area, no electricity for a week, wines sit in 100 degree buildings ... maybe that's why they have the Latour Spritzers.
Eugene Kim
Houston, TX —  June 2, 2009 11:31pm ET
Having seen a hurricane or two myself, I can't help but think that the fine wine folks in HK don't have backup generators for their wine like us Americans. Some of the snide comments above make HK appear to be a backwards third world country with poor knowledge, appreciation and resources. Sounds like jealousy to me.
Troy Peterson
Burbank, CA —  June 3, 2009 6:32pm ET
I guess the money had to go somewhere...
Thomas Hughes
Texas —  June 4, 2009 11:04am ET
James, a little off topic . . . I noticed you scored the 2003 Valdicava Brunello Reserve an 88, yet the 2003 Valdicava Brunello you rated a 95. Did the extra year in the barrel or bottles really hurt the wine that much? It seems like a big difference from a wine that you mentioned as potentially the wine of the vintage. Thanks, Tom
Aidan Campbell
Calgary, AB, Canada —  June 4, 2009 6:37pm ET
I'm just speculating but could it be that due to the taxation change, and lack of previous access to auctions, that the wealthy are simply filling their cellars due to this newfound access? Maybe once the cellars are filled, and the novelty wears off, the market in HK will return to something resembling the rest of the world? It could be that people just enjoy overpaying (or there is some ego component as mentioned in the article) but as the wealthy people there are just as sophisticated as those in NY or London I'd assume they will eventually not want to pay 100 - 200% premiums. I'm not sure but you'd think once supply catches up to demand...normal market conditions ensue. How long that takes would be the real question for the auction houses.

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