It is six months since the start of the zero tax regime and it has certainly spurred on some dynamic feelings in the Hong Kong wine market. While I have always had my doubts about the effectiveness of just declaring a ‘hub’ and hoping it would happen, I had hoped it would lead to lower prices and better value for money – a practical rather than emotional impact for drinkers. I’m not holding my breath.

The evidence of a new buzz around wine is in the increasing number of auctions, dinners and other wine-oriented events around town. Consumers for the most part are yet to feel the benefit though. Every-day drinking wine is only slightly lower in price at the supermarket and restaurant prices seem to be as high as ever.
 
Wine merchants are blaming the high price of oil and the unfavourable exchange rates of the Euro, the Australian and New Zealand dollars for not having savings to pass on to consumers to date. Importers also still no doubt have stock that was taxed that they will have to sell before untaxed stock. Let’s hope we start seeing the savings at some point soon though.
 
Savings to consumers should be one key test of whether Hong Kong can really become the ‘wine hub’ the government is aiming for with the introduction of zero tax. Another key test is the confidence of the wine industry itself. Boris de Vroomen, co-chairman of the Hong Kong Wine and Spirits Industry Coalition has been calling on the government to build specialist storage facilities for wine, out of government funds. Surely if the wine industry was confident in Hong Kong’s future as a centre for the China wine trade it would be investing its own money?
 
The government is certainly trying to build momentum for the hub. The Trade Development Council’s rapid reaction to the regime with its attempts to organise Hong Kong’s own wine show for this month is evidence of that.

The hard work and admirable intentions may be a little misplaced though. The TDC’s experience in organising all manner of trade shows is second to none but this is their first wine expo. The TDC is working hard to raise awareness but many of the world’s winemakers attended the recent Vinexpo show and may be reluctant to come all the way back to Asia for another show, especially Europeans who are now in the middle of their harvest.
 
The show will have the normal surrounding circus of wine dinners and seminars but my own International Wine Centre will not be participating as we have different educational aims and concerns than the organisers.

Talking of the hub and expensive prices, Hong Kong has of course seen some wines auctioned at stratospheric prices and more auctions are promised.
 
The recent Acker Merrall & Condit auction of 922 lots smashed Asian records, especially for a case of 1990 Domaine de la Romanée-Conti and a case and a six magnums of World War II era Château Mouton Rothschild. All very exciting no doubt for buyers, sellers and particularly the auctioneers. I have my doubts as to whether these were good buys. The wine is, however, eminently replaceable and the prices (HK$1.89 million and HK$3.6 million respectively) outside the frenzy of a passionate, Champagne-fuelled auction seem just a little steep.
 
Take Lot 576 for example, the case of Burgundy from 1990 is wine that cost £380 for the dozen bottles on its release in 1990. The current price according to Decanter.com’s authoritative tracking is in the region of £960. Let’s hope that Singaporean purchaser hasn’t been feeling too deflated when comparing that price to the £119,335 that he paid. At least he can console himself with 12 bottles of very nice wine.
 
The generous purchaser will also no doubt have been given a congratulations card by the auction house, as many auction houses do indeed like to hand these cards out to high-spending bidders. These bodies are also in the business of spurring on spending by boasting about records and breaking them. Both traditions contribute to a high-spending atmosphere. Whether they do wine buyers any favours is another matter altogether.
 
Wine auctions should really be in the business of supplying difficult-to-find wines as well as unique experiences. If you want to get the best out of an auction, my advice is to leave your emotions at home, stay away from the Champagne and emulate property developers who barely register the flicker of an eyebrow when they attend multi-billion dollar land auctions. There may be less of a Wow! factor in attending the auction but you will probably make better value purchases.
 
In my view you need to be disciplined and hard-nosed to do well in the wine market.
 
It will be interesting to see how the wine industry prices the new vintages from the southern hemisphere’s March and April harvests. These wines are hitting Hong Kong’s shelves around now and are ideal and very welcome for the boiling tropical heat.
 
The Rieslings, un-oaked Chardonnays, Chardonnays and Sauvignon Blancs are all expected to have a delightful freshness.
 
As I always say, wine is just like a man: it needs a lot of stomping on before it becomes something acceptable to have with dinner.