Two articles from Reuters recently have reported on wine and the Asian Market. Fridays’ report: Global Wine Auctions, Investments to Slow in 2012 is based on an interview with Spanish wine expert, Pancho Campo who is President of the Wine Academy of Spain.
Campo reckons that global wine auctions and investments will slow next year as the euro zone crisis and slowdown in the U.S. economy take their toll on the wine industry, but Asia may prove slightly more resilient.
“Wine collectors, particularly from Hong Kong, bought more than $200 million worth of fine wines at auction in the first half of 2011, nearly doubling the amount for the same period last year. Wine consumption in Asia has seen double digit growth over the past five to 10 years.
Campo acknowledged that there is a “more positive” feeling in Asia, which he has visited eight or nine times.
“I see that there are two tiers in Asia. You have the top tie where you find fine Bordeaux Chateau and the very expensive wines, and that has been very successful,” he said.
“Then you have the lower tier where you have all the cheap stuff, where you have all the wines that sell for lower than 2 euros, 1 euro. In the middle, there’s the big gap.”
He said that key for the future of the industry, particularly in places like Asia where the culture of wine needs to be developed, is to target the young people he termed “the millennials” — those aged 18 and 19 — and get them excited about wine.
“Eventually they’ll go to university, they’ll become CEOS, doctors, architects and that’s the kind of people that you want involved in the wine industry,” he said.
“They might invest, they might not invest, but if they become drinkers, they will drink regularly, and as they get more familiar with wines they will trade up and buy more expensive wines. That is the category that has to grow if the Asian wine trade wants to be successful.”
The second article, Sotheby’s Wine Sale Draws Asia Buyers Despite Turmoil, reported that plunging global markets, the sovereign debt crisis in Europe and deepening fears of another world recession failed to dampen Asian buyers thirst for vintage wines at Sotheby’s October wine auction in Hong Kong.
New York-based Sotheby’s said its first day sale, the eighth part of the long-running Classic Cellar of a Great American Collector, sold all bottles, fetching a total of $3.5 million, just under Sotheby’s highest pre-auction estimate of $4 million. One of the auction highlights was the sale of 12 bottles of 1990 Chateau Petrus at $43,436. Auction highlights also included the six-litre Imperials of Chateau Lafite Rothschild from 2000 sold for $20,167.
The second day of the auction raised $9.2 million from the sale of the Finest & Rarest Wines, including The Ultimate Nine from The Bordeaux Winebank Collection, with the auction led by 12 bottles of 1988 Domaine de la Romanée Conti for $116,346.
“While Chinese investors have made headlines over the past year paying record prices for fine vintage wine particularly Lafite, Robert Sleigh, head of Sotheby’s Asia wine department, said the market was getting smarter and more sophisticated, with prices levelling out after huge gains over the past two years.
Sleigh said instead of having a big price discrepancy for selling in Hong Kong, sales had evened out between Hong Kong, New York and London. The two day sale in Hong Kong saw buyers from all over Asia: “You have people from more sophisticated markets like Hong Kong, Taiwan, Singapore, as well as Vietnam and mainland China.”