The Hong Kong Wine Market

The Hong Kong Wine Market

Hong Kong’s wine industry benefits from many seasoned fine wine merchants well-versed in the global wine trade. The selling, storage, catering, and shipping of wine are only a few local wine-related activities available to the public.

This industry also includes auctions. Trade and distribution of the wine in the Asia-Pacific region have flourished since Hong Kong abolished all duty-related customs and administrative controls on wine in February 2008[1].

There has been an agreement between Hong Kong’s and China’s governments to allow the wine to be imported into mainland China under the Comprehensive Economic and Trade Agreement (CEPA) provisions. Since November 2017, when they were initially adopted, these safeguards have been taken in all 42 mainland customs districts[2].

Hong Kong wine merchants have adopted innovative business practices in the last several years. E-commerce growth, selling expensive collectible wines, and public wine appreciation classes are just a few examples of these innovative new approaches to the wine industry.

Industry Features

There are many experienced fine wine merchants in Hong Kong, each with a particular knowledge base and considerable experience in the wine sector. Because of the rising demand for wine in Asia, in February 2008, customs and administrative regulations on wine were abolished in Hong Kong to establish the area as a wine trade and distribution hub, notably for mainland China[3].

This was done to comply with the WTO’s regulations (WTO). The selling, storage, catering, and shipping of wine are only a few local wine-related activities available to the public. This industry also includes auctions.

According to the Department of Census and Statistics, 820 firms imported alcoholic drinks for wholesale distribution in 2019[4].

It is up from 310 in 2008, whereas the number of specialty stores selling alcoholic beverages rose from 140 to 460 over the same period[5].

The Import of Wine

China and Hong Kong have agreed to allow the import of wine under the Comprehensive Economic and Trade Agreement (CEPA) principles and other steps to increase customs facilitation[6].

Also Read: The History of Winemaking in Algeria: The Beginning (part I)

Consequently, the city acts as an unequaled gateway to the mainland of China. Hong Kong has become an increasingly popular choice for business people worldwide who want to set up or develop their operations there. As a port free from import charges and with dependable air and storage facilities that allow for a large volume of imports.

For Asian investors, Hong Kong is the most convenient place to store their investment-grade wines in preparation for on-demand delivery to markets because of its cost-effectiveness and ease[7].

In recent years, retailers of wine in Hong Kong have been increasing their product lines and implementing new business models. As a first step, several wine merchants are expanding their horizons to cover the mainland and investing in vineyards elsewhere.

Second, many wine merchants have joined the world of e-commerce, either by creating their e-commerce-specific websites or by partnering with other e-commerce platforms. As a third option, some merchants have organized events such as wine appreciation seminars or online discussion groups on social media platforms to engage their consumers[8].

Wine Production in Hong Kong

Given that grapes cannot be grown in the area, Hong Kong produces a small quantity of wine exported to the rest of China at a meager rate. Most wine shipments originate in other countries, Asia being the most popular destination for re-exports.

Hong Kong’s wine exports to Mainland China and Macao accounted for nearly 70 percent of the total in 2020, making them the most significant markets. The entire value of wine exports declined by 40.4 percent in 2020, after a 56 percent drop[9].

Hong Kong imports most of its wine from numerous European countries, including the United Kingdom and France. There has also been an increasing number of migrants from the “New World” countries, such as Australia, the United States, and New Zealand.

In 2020, the value of imported wine will decrease by 14.7 percent. The greatest significant declines were in the United States (-37.0%), Switzerland (-27.0%), and Spain (-47.4%). Hong Kong is expected to import 34.7 million liters of wine by 2020. The remainder, which was a little over 21%, was re-exported[10]. The rest was either exported from Hong Kong or remained in the territory for storage or consumption on a local level.

Industry Trends

The worldwide wine business is expected to rebound in 2021, after a substantial setback in 2020 due to the pandemic. Global revenue from the industry is expected to reach $381 billion in 2021, and the market is expected to grow by 8.51 percent each year between 2021 and 2025, according to Statista’s estimates[11].

Due to the country’s rising buying power, wine merchants are stepping up their attempts to enter the Chinese market. According to Statista, China’s wine business will create $24.5 billion in revenue in 2021 and grow at an annual rate of 6.36 percent from 2021 to 2025.

Consumers in mainland China will have a greater understanding of wine by 2020, according to HKTDC’s market research results. More than half of the people surveyed indicated they drank wine at least once a week or more regularly, and 25 percent said they had intermediate or expert knowledge of wine[12].

Hong Kong has become a hub for several global wine companies, which have relocated their experienced staff to take advantage of the lucrative opportunities on the Chinese mainland.

Thus, in September of 2010, Sotheby’s Senior Director and Director of Asia’s wine department, Robert Sleigh, relocated his family from New York to Hong Kong.

A wine store was opened in 2010 inside Sotheby’s New York City headquarters. A wine retail outlet opened in Hong Kong in 2014, making it Sotheby’s second in the world[13].

Wine Appreciation Sessions

It is a common practice in Hong Kong restaurants and hotels to host food and wine appreciation sessions, in which a variety of Asian cuisines and wines are served together. Due to its expanding status as Asia’s culinary capital, Hong Kong is seeing an increase in the popularity of its upscale restaurants[14].

Additionally, there will be a competition at the HKTDC Hong Kong International Wine and Spirits Fair that several Asian experts will evaluate. The annual Hong Kong Wine & Dine Festival showcases wines from across the world and the food that goes well with them[15].

Public and private educational facilities are expanding or widening the scope of their wine appreciation courses and launching new workforce development programs focused exclusively on the wine business. Various training options are available via the Vocational Training Council (VTC), such as for sommeliers and frontline caterers alike.

Food and wine pairing, wine appreciation, and other subjects related to the beverage are also taught at the International Culinary Institute (ICI)[16]. In addition, Hong Kong Polytechnic University’s School of Hotel and Tourism Management has launched a Master of Science in International Wine Management degree program[17].

See more articles here

Want to read more about wine? Try reading these books!

On This Day

September 27, 2009 – In partnership with the Hong Kong Quality Assurance Agency and government support, the private sector built the Wine Storage Management Systems Certification Scheme[18]. Hong Kong needed a more excellent range of storage facilities than before to enable on-demand shipment to Asian markets[19]. As a result, the facility is required.

References

 

[1] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3. 

[2] Statista, “Wine – Hong Kong | Statista Market Forecast,” Statista (Statista, 2022), https://www.statista.com/outlook/cmo/alcoholic-drinks/wine/hong-kong.

[3] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[4] Statista, “Wine – Hong Kong | Statista Market Forecast,” Statista (Statista, 2022), https://www.statista.com/outlook/cmo/alcoholic-drinks/wine/hong-kong.

[5] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[6] Statista, “Wine – Hong Kong | Statista Market Forecast,” Statista (Statista, 2022), https://www.statista.com/outlook/cmo/alcoholic-drinks/wine/hong-kong.

[7] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[8] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[9] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[10] Statista, “Wine – Hong Kong | Statista Market Forecast,” Statista (Statista, 2022), https://www.statista.com/outlook/cmo/alcoholic-drinks/wine/hong-kong.

[11] Statista, “Wine – Hong Kong | Statista Market Forecast,” Statista (Statista, 2022), https://www.statista.com/outlook/cmo/alcoholic-drinks/wine/hong-kong.

[12] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[13] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[14] Natalie Wang, “Hong Kong Wine Market at a Crossroads,” Vino Joy News, February 25, 2022, https://vino-joy.com/2022/02/25/hong-kong-wine-market-at-a-crossroads/.

[15] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[16] Natalie Wang, “Hong Kong Wine Market at a Crossroads,” Vino Joy News, February 25, 2022, https://vino-joy.com/2022/02/25/hong-kong-wine-market-at-a-crossroads/.

[17] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[18] C N Poon, “Wine Industry in Hong Kong,” HKTDC Research, May 2021, https://research.hktdc.com/en/article/MzEzOTc5OTQ3.

[19] Statista, “Wine – Hong Kong | Statista Market Forecast,” Statista (Statista, 2022), https://www.statista.com/outlook/cmo/alcoholic-drinks/wine/hong-kong.

Image attribute