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.
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.”
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.
Despite the downturn, the fine wine trade remains optimistic. Purcell has observed the return of customers who buy to drink rather than speculate. These customers, “look for quality and value, so prices have had to adjust to the level drinkers are prepared to pay.”
Downturns also signal opportunities. Club Bâtard a private member’s club opened to great fanfare in September. The club at 18,000 sq. ft houses three restaurants, two bars and more than 5,000 wine references. Founder Michael Wu says, “the key concept is to offer wines at retail prices, without restaurant markups, saving members 60-70% on typical restaurant wine lists.” He notes changing patterns: “Consumption is cautious, with less stocking up, selective choosing of bottles for shorter term, and immediate drinking.”
Wine education remains robust
Wine industry professionals all emphasise the importance of education. WSET remains a stronghold of wine education. It opened its first international office in Hong Kong to meet the demand for wine & spirits education in China. This past year 14,375 students enrolled in WSET courses in Hong Kong and China. KaKit Chiu from WSET says Hong Kong’s “demand for training, knowledge-sharing, and interest in wine education remains significant. For Level 1 and Level 2 Wine courses, over 65% of participants are wine enthusiasts, while the remaining 35% are professionals or students working the hospitality industry.”
The Polytechnic University (PolyU) is an important educator for young hospitality professionals. The university offers degrees in hotel, tourism, and events management. Wine education modules remain highly popular according to instructor Haoqing Luo. PolyU offers a Master’s in International Wine Management. Professor Haiyan Song believes that the programme is unique in focusing on the commercial aspects of wine, from marketing analytics to wine economics.
The World of Wines in Facts and Numbers
Classic regions
Classics never go out of fashion. Stockman says, “Bordeaux is still King and drives sales. Burgundy is super popular amongst top end collectors. Australia is for top quality plus value.”
Non-alcoholic wine and spirits
There is an emerging trend for non-alcoholic wine and spirits amongst the younger generation. Haynes attributes this trend to increasing priority on health. At the Grand Hyatt, Yeung has added a tasting flight of sparkling teas, alongside his wine tasting flights.
Sustainability
Sustainability is important. Haynes says that “our wine portfolio has at least 90% adopting sustainable practices. With the brands we collaborate with it is more transparent to find information about the wine from vine to bottle. From the buying side we are choosing to drop gift boxes if there is a choice.” The Cathay Hong Kong International Wines & Spirits Competition, Asia’s premier wine competition, recognises the importance of sustainability. From 2023 it has added a “Light Bottle Wine Trophy” category to promote the use of environmentally sustainable packaging.
Social Media
The local wine trade is increasingly using social media to reach out to a larger and younger customer base. Hedy Zheng Zhou a graduate of the MSc programme in international wine management from PolyU is now a key influencer on Xiaohongshu (China’s Instagram equivalent). She acts as brand ambassador for leading wine and spirits brands. To capture her audience’s attention, she incorporates wine as a lifestyle accessory.
GenZ and beyond
Alan Kwok, Master of The Order of Knights of the Truffle and Wines of Alba (KOA), and VIA Italian Wine Expert is a prominent personality in the local wine scene. His experience shows that consumers in their 30s gain wine experience through wine dinners and tasting events. The KOA is a fraternity consisting of 120 members and hosts a monthly wine and food event to promote wines from Alba. One of the challenges, he says, is explaining and educating consumers on reading wine labels.
Gen Z are a fickle group. KaKit Chiu says: “With their strong affinity for technology, Gen Z is showing less interest in traditional beverages such as wine and spirits. Instead, they are gravitating towards the latest trends such as coffee and beer which have surged in popularity over the past three to four years.” Chiu adds that spirits education outside the trade is popular, particularly among Generation Y and Generation Alpha.
Big events are back
Hong Kong has long been a popular venue for large-scale events due to its convenient location and high connectivity with the rest of Asia and mainland China.
This year Vinexpo returned to Hong Kong after an absence of six years, where 1,032 producers represented 35 countries. It was apt timing, as China had just lifted anti-dumping and anti-subsidy tariffs on Australian wines. This move helped increase the Australian presence with 85 wineries represented. Overall, the show attracted 14,032 from the trade with over 75% from mainland China, Hong Kong, Macau, and Taiwan.
The Italian trade commission (ITA) is an active participant in trade shows, including the HKTDC Wine & Spirits Fair and ProWine Hong Kong, and organises masterclasses for wine professionals. Constant promotion and education have paid dividends. Italy has now risen to become the fifth largest supplier to the local market.
On the consumer side, there is the Wine and Dine Festival, a five-day event that features food and drink from 35 countries and regions. These events attract about 150,000 visitors with about 10% from outside Hong Kong.
The Cathay Hong Kong International Wine and Spirits Competition (IWSC) recently concluded its 16th edition. This year more than 50 wine professionals from Hong Kong and across Asia gathered to judge a diverse entry of wines. Co-founder Debra Meiburg MW believes that the competition has strengthened Hong Kong’s role as a regional wine hub. “By providing international marketing support to our winners, we have drawn attention to Hong Kong. We highlight the competition to our database of 50,000 and via social media to roughly 100,000.”
On 24th September, the Central Bank of China announced the largest economic stimulus package since the pandemic. The measures are aimed at restoring confidence to the world’s second largest economy.
On the same day, Hong Kong was named Asia’s top financial center by the Global Financial Centres Index. To date, the financial markets have reacted positively. This may be the much-needed catalyst to revitalise the Hong Kong wine industry.
The changes in liquor duty will have a significant direct impact. Effective October 16, the Hong Kong government has reduced the duty on liquor priced above HK$200 (approx. US$26) from 100% to 10% for the portion exceeding HK$200. For liquor priced at HK$200 or below, the duty remains at 100%. This move aims to promote the liquor business and boost industries like logistics, storage, tourism, and high-end food and beverage consumption.
Positive news are trickling in. Nick Chan says that Enoteca has already exceeded its sales target for the month. Yeung reports that all hotel restaurants were full over the National Day holidays. Stockman remains optimistic about the future, though he warns, "we need to keep wine relevant."
