Acting Financial Secretary Carrie Lam and HKTDC Executive Director Fred Lam toast the success of the first Hong Kong International Wine Fair
	Buyers are eager to do business now that Hong Kong has abolished its wine tax

They swirled. They sniffed. They sipped. More than 18,000 buyers and consumers from 55 countries attended the first Hong Kong International Wine Fair last month, along with about 240 exhibitors from 25 countries. Organised by the Hong Kong Trade Development Council (HKTDC), the fair featured wine from traditional and newly emerging producers, along with vintages debuting in Asia.
 
Ukraine's Yevpatoriya Winery exhibited at the fair in search of a distributor for its Crimean wine. There was keen interest in the 80-year-old producer's offering, a welcome surprise for Marketing Director Ilya Gzoim, who is especially proud of his company's dessert white wine. "Anyone can make red or white wines, but our Muscat of Tauria captures the unique weather conditions of the Crimea."

"We participated in the wine fair because it will be recognised as the most prestigious trade fair for wines in the Asian region," said Martin Kain, Chairman of Australia's Down South Company. Its Chairman's Reserve 2004 won the red wine category in the fair's "Most Beloved Wine" competition.

Tax cut means business

Hong Kong's first homegrown wine fair was created in response to the Hong Kong Government's February decision to scrap wine duties. HKTDC Assistant Executive Director Raymond Yip said wine consumption in Asia, excluding Japan, was expected to double, to US$17 billion, in four years. "We forecast that in the coming five years, the Asian wine trade will grow by 10 to 20 per cent a year. This rapid growth is powered largely by the Chinese mainland, along with Hong Kong, Taiwan, Singapore and Korea."

International wine merchants have responded by setting up operations in Hong Kong. San Francisco-based Vinfolio, a fine wine and collector services company, will launch its first international business venture in Hong Kong next month, with the opening of a 4,900-square-metre wine storage facility.

Founder and CEO Steve Bachman said Vinfolio had long set its sights on opening a regional office in Hong Kong. "We had already been looking into setting up in the region. But the abolition of wine duties here prompted us to do it sooner rather than later. I totally buy into the idea of Hong Kong being a regional wine hub." Mr Bachman said Hong Kong was the ideal place to broaden his market in the region – a major economic centre "you can't afford to ignore."

China's largest wine merchant, Jointek Fine Wines, is similarly sold on Hong Kong. It plans to move its headquarters from Guangzhou to Hong Kong to take advantage of the zero wine duties. Jointek opened its headquarters in Guangzhou in 2001 to import internationally established brands to the mainland, where the wine duty is nearly 50 per cent. But General Manager Tommy Lau said more mainland wine investors are now buying their wines in Hong Kong to take advantage of the tax waiver.

Duty-free wine port

Officiating at the fair's opening ceremony, Hong Kong acting Financial Secretary Carrie Lam, said that the Government's abolition of wine duties makes Hong Kong the first free wine port among major economies. The Government, she said, is looking to open more space for wine storage, including considering heritage buildings as possible storage sites. A former British underground bunker on Hong Kong Island is already operating as a fine wine storage run by Crown Wine Cellars. "Old buildings go very well with old wines," Ms Lam said.

Following the fair, the Hong Kong Government signed a Memorandum of Understanding (MOU) with France to cooperate in wine-related businesses. "With its logistical and financial expertise, its unique knowledge of the mainland market, as well as the strength of its hospitality and retail sectors, Hong Kong is a natural wine hub for Asia and is well-positioned to catch the emerging business opportunities of the fastest-growing international market," said visiting French Minister for Agriculture and Fisheries Michel Barnier, in Hong Kong for the MOU signing.
 
Next year's Hong Kong International Wine Fair, to be held 4–6 Nov 2009 alongside the new Hong Kong International Food Fair, will feature the first Hong Kong International Wine and Spirit Competition. Modelled after London's International Wine and Spirit Competition, the competition will focus on the Asian market, with Asian wine critics slated to be among the judges.

Related links
Vinfolio 
Yevpatoriya Winery