Thursday, June 19, 2008

A Tale of Two Cities

An article that originally appeared in Meininger's Wine Business International

Robert Joseph at Vinexpo, Hong Kong
Robert Joseph with
Hugh Kevin & Robert
wines in Hong Kong
There was once a New Yorker magazine cartoon in which a man having breakfast in an featureless hotel "buttery" turns to a diner at another table to enquire "Excuse me, could you settle a bet: is this the Athens Hilton or the Vienna Hilton?". I must confess that I almost had a similar moment of dislocation at the end of May. Was I in the Hong Kong Convention Centre or the Excel Exhibition Centre in London? With only a few days between them and so many of the same faces, the London Wine Trade Fair and Vinexpo Asia occasionally felt like consecutive episodes of the same television series.

But, you only had to look or listen for a moment to tell the difference between these two events. One of them was a serious commercial gathering, packed with people eager to taste and buy top class wine, while the other was… the London Wine Trade Fair. In the British capital, the talk was still of the recent hefty increase in duty rates that was threatening retailers' ability to offer three bottles of wine for £10 and seemed set to halt the growth in UK wine consumption. In Hong Kong, the chatter was about the total removal of excise duty and import licences, and the revelation by the Chief Secretary Henry Tang at the opening ceremony that, even before the abolition of duty, the volume of wine imports into Hong Kong had risen by 120% percent, while the value had gone up by 200% since 2007.

At least one British visitor sniffed disdainfully at the US$100,000 Acker Merrill had spent on hospitality before its first-ever Asian auction, and the red and gold hardback catalogue. But it was the New York firm that laughed all the way to the bank - where they deposited the $8.2 million raised by the sale; 10% over estimate, and conveniently a figure that includes the two luckiest numbers – 8 and 2 - in Chinese culture. Just as happy, presumably, were the great and good of Bordeaux whose Union des Grands Crus tasting of 2005s proved so popular that stocks of many of the wines ran out a full three hours early, allowing them to head off for lunch.

Many of those chateau owners had less than fond memories of Vinexpo 1998. Hong Kong's Peregrine Investment Bank had just collapsed, creating a panic in the local stock market, the Hong Kong Dollar had to be propped up against attacks from speculators, and Japan was officially declared to be in a recession. Unsurprisingly, attendance that year was sparse and exhibitors spent much of their time complaining to each other that most of the people who did attend were local – very local – expatriates. That gweilo – western foreign devil - focus was just as evident at the dinner to launch the first Watsons Wine Cellars shop where I only recall seeing one Chinese face.

Ten years on, Vinexpo 2008 was packed, with over 8,000 professional visitors, of whom over a quarter came from the mainland; gweilos were firmly in the minority. Watsons Wine Cellars now has a dozen stores whose customers – mostly Chinese – choose from a brilliant range of 2,000 wines. Today, thanks to these stores a wine lover in even the more obscure parts of Hong Kong has far easier access to good bottles than his counterpart in London. But much the same can be said of Seoul, Osaka and Taipei… For an outsider – even one like myself who spends over a month a year in Asia – the most striking development is the speed at which the market is evolving, and the way that evolution is affecting areas that you might not have expected. When talking to a wine importer with a focus on Cambodia and Laos, I used what I thought of as a bit of my local knowledge in saying that I presumed that the main market in Cambodia would consist of the recently-built international hotels around the temples of Angkor Wat. “Not exactly”, came the response. “we’re actually selling rather a lot of good wine in Phnom, Penh. Aurelio Montes from Chile can tell a similar story about Vietnam, where he’s selling several containers of wine every year. Canny producers are increasingly studying their maps of the region, knowing that planning a trip to China that only takes in Beijing and Shanghai is like aiming all your US sales efforts at New York and Washington DC. My next excursion, for example, includes hosting a Leoville-Barton dinner in Guangzhou…

As Robert Parker who had spent two weeks of “the most exciting trip of a lifetime” hosting that kind of event across the region wrote it in his blog, “Asia Rules....and then some”.