wine industry to evaluate the economic benefits of wine duty exemption, HKDTC Research notes that about 850 new wine-related companies were set up in Hong Kong in 2008 and 2009, which raised the total to 3,550. Further, the wine sector as a whole gained HK$5.5 billion worth of wine-related business receipts in 2009, representing an increase of over 30% as compared with 2007. Manpower headcount The number of employees engaged in wine-related business, meanwhile, increased by more than 5,000 as compared with 2007 to reach 40,000 by the end of 2009. According to HKDTC Research, this employment gain translated to about 1,000 full-time jobs, 60% of which were for front-line staff. The number of wine-related manpower and professional courses including sommelier training as well as wine business or management courses also grew from 21 in 2007 to 86 in 2009. The number of participants in these courses reached over 8,500 in 2009, representing an increase of
more than two times as compared with about 2,400 participants in 2007. Asian brewing centre According to HKDTC Research, Hong Kong wine auctions usually outperform those in London and New York, thanks to the surge in demand from Asian investors. High-value, investment grade wines are usually sold through auctions mainly organized by Christie’s, Sotheby’s and Bonhams. Simon Tam, Christie’s Head of Wine, China, says that buyers around the world are now making bids in Hong Kong wine auctions either on-site or via video technologies. “It is precisely because of the absence of geographical restrictions that Hong Kong wine auctions have become truly international events, so much so that many premium suppliers are willing to put up their goods for auctioning in Hong Kong,” says Tam. California State Trade and Export Promotion (STEP) program
“The wine sector as a whole gained HK$5.5 billion worth of wine-related business receipts in 2009, representing an increase of over 30% as compared with 2007.”
Performance of Hong Kong’s Wine Trade^ Wine (HS 2204-5) Trade 2010 2011 Jan-Sept in value terms HK$Mn. Growth % HK$Mn. Growth % HK$Mn. Growth % Total Exports 1,336 +75.7 1,913 +43.2 1,384 -6.9 Domestic Exports 1 = * +73.6 - -100.0 Re-exports 1,336 +75.6 1,913 +43.2 1,384 -6.9 Imports 6,982 +73.2 9,790 +40.2 5,989 +18.3 Wine Exports for Markets 2010 2011 Jan-Sept (by value) Share% Growth% Share% Growth% Share% Growth% Asia: 96.9 +81.5 97.2 +43.6 92.1 -12.3 Chinese Mainland 37.7 +82.9 42.1 +59.6 55.2 +27.3 Macau 52.3 +76.0 48.8 +33.7 29.8 -45.6 Vietnam 41 +539.1 2.9 +2.1 3.5 +3.3 Singapore 0.9 +27.5 1.6 +145.6 1.2 -17.8 Taiwan 0.6 -10.2 1.2 +173.5 1.1 -15.9 U.S.A 1.6 +45.5 0.9 -21.9 3.2 +374.5 Wine Imports by Origin 2010 2011 Jan-Sept (by value) Share% Growth% Share% Growth% Share% Growth% Europe: 81.8 +82.5 83.8 +43.7 76.9 -24.9 France 59.0 +80.6 62.8 +49.1 57.0 -25.0 U.K. 13.9 +74.6 12.9 +30.0 11.3 -31.3 Italy 2.2 +44.9 2.5 +39.2 3.1 +28.7 Australia 6.0 +26.7 5.6 +32.2 7.3 +7.8 U.S.A. 5.4 +15.6 6.0 +57.1 7.0 -8.6 Chile 1.9 +34.6 1.4 +1.5 2.3 +35.5 Wine Trade 2010 2011 Jan-Sept in volume terms Mn. litres Growth % Mn. litres Growth % Mn. litres Growth % Total Exports 12.339 +45.0 18.494 +49.9 14.424 +1.4 Domestic Exports 0.002 = * -98.0 - -100 Re-exports 12.336 +44.9 18.494 +49.9 14.424 +1.4 Imports 40.007 +14.8 48.203 +20.5 38.415 +9.2 ^ Since offshore trade has not been captured by ordinary trade figures, these numbers do not necessary reflect the export business managed by Hong Kong companies. * Insignificant Source: HKTDC Research
director Jeff Williamson told Hong Kong Business that significant opportunities for growth from China will balance out the challenge of a competitive environment. “It is estimated that the market for imported wine in China could be as much as 200 million consumers, yet the current user base is about 20 to 30 million, providing significant opportunities for growth,” he said. Citing a data from Wine Institute, Williamson notes that California wine exports to Hong Kong in 2011 amounted to $163 million dollars, a 39% increase over the previous year. Local consumers Domestically, wines are sold through off-trade channels such as supermarkets, specialty stores and convenience stores, and on-trade channels such as bars, restaurants and club houses. According to Euromonitor International, wine sales in Hong Kong amounted to HK$2.9 billion or 12.3 million litres in 2011, up 31% and 34% respectively compared to five years ago. For 2012-2016, wine sales are forecast to grow 6% per annum in value terms and 3.9% per annum in volume terms. Currently, off-trade channels account for approximately 46% of total wine sales in value terms and 64% in volume terms in 2011. Christie’s Tam remarks that wine prices are escalating steadily and consumers are now paying attention to the years and regions of wine production. In particular, wines less than two years old, he says, are becoming favourites of the market. Christian Pillsbury, managing director of Applied Wine, used the “Long Tail” theory to explain the Hong Kong wine market. In pointing out the significant growth potential in wine consumption frequencies, he says, “Currently, of all wine consumers in Hong Kong, only 22% are frequent drinkers (drinking three to four times a month to more than four times a week) and more than half are nonfrequent drinkers (drinking once every one or two months).” Research firm Sopexa notes that HONG KONG BUSINESS | JANUARY 2013 25