“Take these bottles of Château Petrus, their price has increased seven-fold since we bought them,” our host Gregory De’eb, founder of Crown Wine Cellars tells us. His Hong Kong restaurant doubles as a private wine club housed in a former World War II bunker. The territory’s connoisseurs gather here to network, socialise and enjoy fine wine.
A South African diplomat in a former life, De’eb made his fortune in the wine business. His passion goes beyond money, but Hong Kong’s decision in February to remove all taxes on wine has certainly helped him keep his passion alive. Hong Kong has now become the cheapest place to buy wine in the world and French vineyards are reaping the rewards.
Gregory De’Eb, owner of the wine tasting club Crown Wine Cellars Limited
“Since the new tax rules have been instated there has been a change in drinking habits. People who used to drink a 50 euro Australian or South American wine still spend 50 euros, but now they go up a step in quality,” Eric Desgouttes, the French director of Watson’s Wine Cellar tells us.
And that step up in quality is what is helping French vineyards. Thirty percent of Hong Kong’s wine imports now come from France. In the seven months since taxes were eliminated, sales have increased 80%. Hong Kongers have taken a taste to these higher quality bottles.
Around one million cases of vintage wines are cellared on the territory, a quarter of the world’s total. They are stored in places like Gregory De’eb’s bunker come restaurant; a small percentage to be drunk, the rest left to gain years and value.
Wine is virtually a risk-free investment (unless you are clumsy enough to drop the bottle) and is all the more interesting in Hong Kong, the main gateway to the enormous Chinese market.
“The wines of the world pass through Hong Kong before moving on to China. They normally come from France or Spain, or are forwarded on from the UK, and they must usually pass through here before heading to the mainland.” explains De’eb.
By 2020, China is expected to be consuming half a billion bottles of wine a year – a massive increase from the paltry 20 million it drinks at the moment, and a massive opportunity for Hong Kong ‘s wine merchants. Others are also trying to get a piece of this lucrative market, with Macau’s government now contemplating a similar tax exemption on wine.
With exports of French wine to the United States falling 10 percent this year alone, China now appears to be the new Eldorado for French vineyards, as the global financial crisis is doing little to take the shine off Hong Kong’s wine glasses. Cheers!