A Postcard from Asia

A Postcard from Asia

It was hot and humid; the air thick and the city bustling.  It was the beginning of July and I had just landed back in Hong Kong.  I thought to myself, I had to get ready for dinner; no time to waste. I hauled 65 pounds of luggage along with a case of wine up to my apartment that was located on a 5th floor walk-up.  I quickly freshened up and rushed off to dinner, without an idea of what awaited me.

Picture2And there it was, sitting on the dinner table, a bottle of 1989 Château Haut-Brion, one of the greatest wines ever made of the last half century.  My friend brought the wine because I have never tried it and he thought it would be a good bottle to share – was he right!  A couple days later, a bottle of 1985 Nuits-St.-Georges, Domaine Leroy was cracked open over lunch.  Another pleasant surprise of the summer happened about a week later – a bottle of 1983 Hermitage, La Chapelle, Paul Jaboulet Aîné – delicate, balanced, and mesmerizing with incredible finesse; it was everything a Rhône promised and so much more.

Collectors and consumers have always drank well in Hong Kong, long before the explosion of wine trade that happened after the duty exemption in 2008.  But now, just like the spotlight is on Mainland China from an economic and political standpoint, the limelight has been on Hong Kong in the wine regime for the past 5 years.  With the duty lifted, suddenly every international wine trader and negociant has established a Hong Kong office; every winery and chateau wants to get a piece of the pie. Result?  The market is saturated with vendors and on any given day there is more than one wine event. I know of 30 wine dinners and tastings held in Hong Kong in September, and that is only a fraction of the events that happen in this city.

The consumers are blessed with options, numerous options. With wine events, offers, retail shops and vendors abundant, it is becoming increasingly difficult for buyers to make decisions. And in the world of fine wine, a customer can receive the same offer from five to ten different merchants on the same day.  The question left to answer is – how do you differentiate?  How does a consumer make a choice when so many of the available products and offers seem identical?  Like many other businesses in Asia, it all boils down to relationships.  Unquestionably service matters, product quality matters, but without relationships, you can’t get that 20 minutes out of people’s schedule.

While the end consumers and collectors in Hong Kong are sophisticated and the wine market is flooded with choices at competitive pricing, the on-premises selections are discouragingly expensive and selections unadventurous.  The sky-high rent in Hong Kong compels restaurateurs to carve a high profit margin on alcoholic beverages.   Diners are much more prone to bring their own bottles due to the deterring prices and restaurants in turn need to keep the high premium and balance the cost.  A vicious cycle is born.

While my observations have pointed out some aspects that are not so rosy and glossy, it is a fascinating world out here; with wine shops on every other corner and each world-class producer making their pit-stop, it is indisputably one of the most important trading platforms of the world.  The energy draws in the merchants, but who will be able to stay?  It is survival of the fittest, and it is a jungle out there.

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