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Grape Expectations

Hong Kong’s Margaret River Wine Shop takes its name from Western Australia’s popular wine-growing re  

Hong Kong's Margaret River
Wine Shop takes its name from
Western Australia's popular
wine-growing region 

 

Financial Secretary John Tsang put it simply in his February 2008 budget address. In announcing the abolition of wine duties in Hong Kong, he said the government wanted to spur an entire industry into action. The results have been impressive, to say the least. 

In the year ending March 2009, Hong Kong's wine imports soared to US$412.5 million. That's a year-on-year increase of about 80 per cent – thanks to the scrapping of wine duties. 

The Financial Secretary continues to spread the good word on wine in his travels this year. He's eager to drum up business and to let the international market know just how vibrant the wine trade in Hong Kong has become.

"The wine industry predicts the Asia market to boom in the next decade,'' Mr Tsang explained to a "Hong Kong – Asia's Wine & Gourmet Centre" luncheon, held at a vineyard in the historic wine-growing region of Napa Valley, California, earlier this year. 

 

Wine School

 
        Jennie Mack      AWSEC   
  "The increase in demand for our classes has been incredible," says Jennie Mack, Managing Director of the Asia Wine Service and Education Centre (AWSEC)  
 


For the past 15 years, Jennie Mack has been trying to share her passion for wine – and the wine business – with the people of Hong Kong.

As Managing Director of Hong Kong's Asia Wine Service and Education Centre, Ms Mack has seen hundreds of people pass through her classes. There, they learn everything from how to pour wine to the finer arts of becoming a professional sommelier.

The change she has seen in Hong Kong over the past 12 months, however, has her buzzing. "The increase in demand for our classes has been incredible,'' she says. "What's more, so many of our past students are now finding work and establishing their own careers and businesses in the wine trade.

"In the beginning, for some of our courses, we would have enough students just for one class. Now, we have so many people contacting us and wanting to enroll.''

The rapid growth in opportunities for SMEs is a direct result of the Hong Kong Government's move to abolish all wine duties, Ms Mack believes. "There is no doubt this has opened the wine industry up to more people,'' she says. "Some of our ex-students have even opened up businesses in direct competition to us, but we don't mind - too much! Everything is good for the industry.''

A positive sign, according to Ms Mack, is that the people opening up new businesses are educating themselves first. That includes, she says, those opening small wine shops, restaurant owners increasing the variety of their wine selections and those investing in their own collections. 

"I have always found that the more people know about wine, the more they want to know.''

A positive sign, according to Ms Mack, is that the people opening up new businesses are educating themselves first. That includes, she says, those opening small wine shops, restaurant owners increasing the variety of their wine selections and those investing in their own collections.  

"I have always found that the more people know about wine, the more they want to know.''

 
     

"In the mainland of China alone, wine imports are estimated to reach US$870 million by 2017. This would account for 58 per cent of the projected market for wine in Asia, excluding Japan.

Wine “quietly ageing” at Hong Kong’s first winery, 8th Estate  
Wine ageing at Hong Kong's first winery, 8th Estate  
"Hong Kong," he added, "is well placed to facilitate the growth of the wine market in our region.'' 

That's putting it mildly. There has been an impressive growth in opportunities on the ground in Hong Kong, according to wine industry players, as well as a rapid rise in interest in wine among the general public. In short, the city is a getting a taste for the business of wine – and fast. 

A report released in April this year by British industry consultants the International Wine and Spirit Record found that wine consumption in Hong Kong is expected to surge by a third, to 4.2 litres per capita by 2012, which would make it the highest in the region. 

Urban Winery

That spells opportunity for companies such as 8th Estate. Hong Kong's first "urban winery," 8th Estate is situated in an industrial building in Hong Kong's Ap Lei Chau district. 

The company sources its grapes overseas, flash-freezes them and then produces its wine locally. Opened only since last December, 8th Estate has so far produced 100,000 bottles of wine; a little over half has been sold, while the rest is ageing. 

"The wine industry is growing tremendously in Hong Kong,'' says Lysanne Tusar, Director of 8th Estate. "Wine is becoming a daily beverage, and the change since the tax was abolished has affected a wide range of consumers. 

"For those new to wine, it has highlighted wine as a premier beverage choice. For those who are top-end collectors, it has helped elevate the ability to expand collections and consumption rates. Hong Kong is quickly making its mark on the global wine community,'' she adds. 

Ross Meder, who operates the Margaret River Wine Shop in Wan Chai, agrees.

In 2007, a life-long passion for wine led the Canadian-born businessman to open his small shop. Covering wholesale and retail sales, it has recently expanded to take in vintages outside the wine-growing region of Western Australia from which it takes its name. In total, the shop stocks about 150 different bottles. 

Over the year and more, Mr Meder has been able to chart the difference the abolition of the wine duty has made to the industry. "There has been a huge surge in business and in business opportunities,'' he says. "We have seen wine shops opening up everywhere – including right across the street from us – and the increase in wine auctions is leading people to buy more valuable wine, look for places to store their wine and learn more about wine.'' 

Wine imports from the United States have returned the most impressive figures of all markets exporting goods to Hong Kong - rising to €13.44 million in value to February 2009, a year-on-year rise of 500 per cent. But Mr Meder believes there is no limit to which markets Hong Kong consumers will turn to. 

"We started out just with Margaret River wines,'' he says. "But it's a bit like the wine industry in Hong Kong itself. The more people become interested, the more wines they discover and the more people they want to do business with us.''

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