With taxes and import duty abolished and wine seen as an investment, Hong Kong is a wine lover's dream.

My Air New Zealand flight from Heathrow to Hong Kong is awash with wine merchants. Since the Hong Kong SAR Government abolished all import duty and taxes on wine last year, British merchants and auction houses have been falling over themselves to grab a slice of the action. They are flying from UK gloom to HK boom.

Farr Vintners and Berry Bros & Rudd led the way, spotting the Asian market's potential several years ago. Since then, the likes of Armit, Bordeaux Index, Fine & Rare Wines and Quintessentially Wine have followed, setting up offices and outlets in Hong Kong and reaping the benefit of soaring wine sales both here and in mainland China.

And, since it's estimated that 40 per cent of the fine wine auctioned in London ends up in the region, it is no surprise to learn that Bonham's, Christie's and Sotheby's are also in town hosting lucrative sales.

Last year's inaugural Hong Kong International Wine & Spirits Fair (hastily arranged in the wake of the duty cut) was such a success, with visitors from 55 countries, that this year's event promises to be even more lavish. It will also incorporate the first ever Hong Kong version of the International Wine & Spirit Competition. A Wine and Dine Festival is planned too.

"The removal of the duty band has revolutionised the fine wine market," says Jamie Graham of Fine & Rare Wines, whose office opens in the city next month. "And as the gateway to Asia, Hong Kong is well positioned to become one of the top three fine wine trading hubs in the world after London and New York. In fact, so many people here and in China are now drinking wine and investing in it that I can even see Hong Kong edging ahead in a few years."

A quick glance in the wine shops of Hong Kong airport supports this view. Unlike the ubiquitous brands and vinous dross one usually sees at Heathrow or Gatwick, here the stores are crammed with such treats as 1985 Le Pin, 1989 Château Haut Brion and 1998 Château Pétrus. Oh, and double of magnums of 2005 Château Mouton-Rothschild – yours for a cool HK$118,500 (£10,580).

"Wine imports rose by 88% in the wake of the duty abolition," Wendy Cheung, the principal assistant secretary for Commerce and Economic Development, tells me. "We are the first free wine port among the major economies and plan to capitalise on this. We estimate that as wine sales fall in Europe they will double in Asia to US$17 billion by 2012 and US$27 billion by 2017. This will be driven largely by mainland China where economic growth, rising income and lifestyle changes have led to a 360% increase in wine imports since 2005."

Red wine is far more popular than white. In Chinese culture red is seen as an auspicious colour and, thanks to much-quoted medical research, red wine is believed to be good for one, an important selling point to the health-obsessed Chinese.

"When we started here ten years ago, nearly all our customers were expats," says Nicholas Pegna, MD of Berry Bros. "Today the overwhelming majority of them are Chinese buying for investment, with several spending more than £1m a year with us. Wine is seen as chic and aspirational and new consumers are learning about wine fast. They also like to give status-symbol gifts and, since Hong Kong has the highest concentration of Rolls Royces per capita, there is no doubt that they can afford to buy the best."

As well as notable UK merchants there are companies such as Watson's Wine Cellars and Ponti Wine Cellars who both sell remarkable ranges of cru classé claret. Down the dingier back streets of Kowloon there are other shops too. Their ranges might seem equally impressive on paper, but the actual bottles look pretty dodgy on close inspection, their standard of storage and provenance uncertain.

The reputable merchants, though, guarantee their wines to be in excellent condition and offer temperature-controlled warehousing for their customers' purchases – Crown Wine Cellars has even converted Hong Kong's Central Ordinance Munitions Depot for the purpose. But there is the occasional daft situation whereby wines are brought to Hong Kong for auction direct from grand Bordeaux estates and are then promptly sent back to the UK for storage by the buyer.

With all this fine wine heading into Hong Kong (China, Taiwan and Korea) will there be enough left for UK wine lovers, especially come en primeur time, or is this a case of Chinese takeaway?

"Don't panic," says Pegna. "It's true that more fine claret is coming here than before, but it's currently at the expense of the United States and Japan, rather than the UK. And if en primeur prices do increase, it's thanks to the châteaux themselves not because the Asian market has shoved prices up."

It is a fine time to a wine lover in Asia. In Hong Kong they promote wine as good for one's heart and general wellbeing and abolish all duty; in the UK they plaster the bottles in health warnings and hike the duty to unprecedented levels.