For most Australian wine consumers the last few years have been a buyer’s heaven. The wine glut, increased competition from overseas, a high Australian dollar and the GFC have created a ‘perfect storm’ – leading to some of the best buying opportunities in decades!
So you may be surprised to hear that in Asia, and in particular Hong Kong and China, demand for wine is accelerating and prices, especially for first growth Bordeaux, are booming. William Lyons of The Wall Street Journal reported that the price of Chateau Lafite Rhothschild 2000 has climbed 611 per cent since December 2004. A Bull Market for Wine: Top vintages have outperformed almost every other asset class over the past decade. How much longer can it last? The Wall Street Journal, 19 September 2010.
Recent Sotheby wine auctions in Hong Kong achieved 100 per cent clearance rates and more than 80 per cent of the lots sold for prices that exceeded high estimates. A 12-bottle case of Domaine de la Romanée-Conti 2005, for example, sold for US$232,962, equating to approximately $US19,413 per bottle! Sotheby’s Big Wine Haul by Amy Ma, The Wall Street Journal, 4 October 2010.
What’s fueling Asian demand for fine wine? Lyons says that Hong Kong’s decision to abolish all import duties and taxes on wine in 2008 is one of the reasons behind the boom. But as Shayne Heffernen explains in his very interesting article, China’s Emerging Wine Market, Live Trading News, 17 October 2010, over the past 10 years increasing cultural and business exchanges between Chinese and Westerners have for the time created a wine culture in China.
Today, affluent urban Chinese are associating wine with sophistication, vitality and high social status, according to Wu Jianhua, head of the Shanghai Drinks Association (SDA). Jenny Li, a Chinese wine market analyst for UK-based Wine Intelligence, says that middle-aged Chinese also believe that drinking red wine daily is good for general health. Red wine sales in China are also benefiting from its auspicious colour, which signifies good luck and happiness… [Read More]