There were a few quizzically raised eyebrows last week when Hong Kong's commerce and economic development minister Rita Lau told a lunchtime audience at the Vancouver Board of Trade that part of the territory's plan to survive these perilous times involves promotion of its wine industry.
Eyes went blank as diners sifted through their memories trying to recall pictures of their last visits to Hong Kong and whether Kowloon Peak, the hills above Sai Wan or Lo Fu Tau had suddenly sprouted vineyards without them having noticed.
And if indeed Hong Kong has suddenly arrived on the global wine stage, what sort of product would it be?
The Motherland China's foray into this market with the aid of French partners in the 1980s has so far produced vintages which many wine buffs consider sub-plonk.
But Hong Kong's genius has always been trading rather than production.
Less than a year ago the Hong Kong government and the wine trade industry looked at the prospects for wine sales in Asia and saw an opportunity.
The predictions, as Lau told her Vancouver audience, are that by 2017 the value of wine imported into Asia, excluding Japan, will be up to $1.5 billion US a year. And of that about $870 million US will be heading for China, where many among the wealthy elite have developed a highly sophisticated taste for the best wines available.
Hong Kong, of course, never does things by halves. Once the decision was made that Hong Kong was going to become THE wine trading centre of Asia, the cultural machine that sees government and business function as one was thrown into gear.
In February the Hong Kong government reduced the duty on wine from 40 per cent to zero, making Hong Kong the first free wine port among the major economies and giving it a decided edge over the current wine trading centres of Singapore and Tokyo.
Wine traders and dealers from all over the world immediately sat up and took notice. After all, when you're flogging bottles of Chateau Lafite '82 for, say, $3,200 a pop, a saving of $1,300 on duty that no longer has to be paid is a very attractive proposition. It can pay and pay big for dealers in the world's premier wine trading centres of London and New York to go through their caves, load up containers and ship them off to Hong Kong for sale.
A problem, of course, is that Hong Kong is in the tropics and fine wines are not best pleased when subjected to heat or gyrating temperatures. They like it cool, dark and consistent.
From the start of Hong Kong's wine hub project, attention was paid to the problem of storage. In fact, the territory is blessed with countless suitable caves burrowed into the mountain sides by the British military and, during the occupation of Hong Kong by the Japanese, to store munitions or serve as air raid shelters.
And so solicitous is the Hong Kong government of the health of the territory's burgeoning stores of delicate wines that customs inspections can now be conducted at the traders' temperature and humidity-controlled premises.
Hong Kong conducted its first International Wine Fair in August. It attracted 8,800 trade buyers from 55 countries and territories, including 80 Canadians from 45 companies.
But the true test of Hong Kong's success so far in striding into this market is the results of auctions. And while those results have been good, it is evident that even the excessively rich are curbing their enthusiasms in these troubling times.
The inaugural Hong Kong auction by the New York wine dealer Zachys in October sold 85 per cent of the 871 lots for $5.2 million US, about $400,000 US below the pre-sale estimate.
And another American wine auction house, Acker Merrall & Condit had a similar experience in mid November. It sold 90 per cent of the 950 lots of fine wines and champagnes for $6.7 million US, with many lots selling for up to 20 per cent below their low estimates.
This was in contrast to Acker's inaugural auction in May which brought in $8.2 million US after frenzied bidding.
But there is little doubt Hong Kong is on the track to becoming a major player in the Asian wine market.There was sure confirmation of that recently when the former Portuguese colony Macau, now also a special administrative region of China and always jealous of Hong Kong's greater success, decided to follow Hong Kong's lead and also eliminate entirely its duty on wine.
from www.canada.com by 2008-12-02