Between January to June 2024, Hong Kong imported US$450.2m worth of wine. This signalled a drop of about 15.84% compared to the same period in 2023. The top five importing countries by value are France, Australia, the United Kingdom, the United States, and Italy.
The slowdown in growth reflects the stagnant macroeconomic environment with high interest rates and slowing economic growth in China.
Dramatic changes in travel patterns have also impacted the local economy. The Asia Tourism Exchange Centre (ATEC) survey revealed that 80% of Hong Kong residents visit mainland China between one and 10 times a year. The impetus comes from convenient transport and a strong Hong Kong dollar that renders dining and shopping better value. Locals are choosing to spend their money abroad rather than at home.
On the inbound side, the Tourism Board reported that 21m visitors arrived in Hong Kong between January to June this year, an increase of 64%. However, spending patterns have changed, as visitors shy away from luxury spending and are selecting more affordable dining and entertainment experiences.
Wine distributors are hurting
Local wine distributors are facing challenging times. Betsy Haynes, Managing Director of Northeast Wines & Spirits says, “Locals are back to their normal travelling pattens, yet we are not attracting long-haul travellers into the city. For us there is a 30% decrease in revenue compared to pre-Covid.” Moreover, Haynes cites rising costs from rent, salary, and transport for F&B business closures and consolidation in the industry.
Market dynamics have changed significantly. Jeremy Stockman, managing director at Watson’s wines, HK’s largest wine retailer with 23 retail outlets, has his pulse on the local market. He sees “discounted wines with no provenance and traded wines with questionable sourcing and conditions.” Moreover, landlords are slow to adjust rents to meet the challenging market conditions.
Nick Chan CEO of Enoteca Hong Kong foresees improving business conditions in 2025. The return of large-scale events, with more people coming in September, has contributed to improved business. Enoteca is one of Asia’s largest wine retailers with seven local retail outlets, plus its online and wholesale business. Chan says customers are spending less, with their sweet spot US$40-65 retail per bottle. Chan believes that Brunello di Montalcino still offers value and quality, and he has added six new labels to their portfolio. To attract new wine lovers Enoteca sells a tasting case priced at US$154.
Value is critical for fine wine
Hong Kong plays a key role as a regional fine wine hub with its zero percent wine duty. Jo Purcell, Managing Director of Farr Vintners Asia, says “It is so easy to import wines and Hong Kong’s location makes it perfect for Asia.”
The current economic downturn has affected sales in the fine wine market, however. Mandy Chan, Co-Founder of Ginsberg + Chan adds “private clients are taking a wait-and-see [attitude].”
Billy Yeung, Head Sommelier at Grand Hyatt, has seen a trend with customers ordering less trophy wine and becoming more experimental. He notes an increase in interest in high-quality, boutique wines from China. One of their hotel outlets offers a tasting flight of Chinese wines including a Saperavi from Western China.
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