Wines News & People
Once, twice, thrice … Wine sold!
A review of the Hong Kong Wine Auction Scene.
Compiled by Daniel Lim, Gary Ong and Lawrence Tham.
Bottle Images by Acker, Merrall & Condit and Sotheby’s Asia.
Sotheby’s April auction: Château Lafleur and Le Pin.
Acker’s March auction: 1985 and 2003 DRC La Tache.
US-Based Acker’s John Kapon as pictured above.
Greater China Sotheby’s Asia’s Patty Wong.
Singapore and Hong Kong: The Hong Kong wine auction scene heated up following the abolition of wine duties last year, as bullish wine auctioneers and brokers returned to Hong Kong, Asia’s wine capital.
Even as the world headed for recession in 2009, fine wine was hailed as a liquid asset above the fray, with the advantage of historically being weakly correlated to other investments such as stocks, bonds and property.
But the past few months have shown that even wine is not quite as immune to economic forces as those selling would have us believe. The easing of the pound and decline of wine prices in London, a key market in Europe, has continued to encourage wine connoisseurs to import direct, bypassing their local channels. Sales were down significantly in the cities of Singapore and Hong Kong.
Analysts feel that the decline in wine prices will continue as both members of the wine trade and investors seek to cash in on profits accumulated over the years, and to compensate for losses on the stock and property markets. Most connoisseurs agree that Bordeaux will continue to be a good investment in the longer term.
“The reason why Bordeaux is such a good investment is all down to the simple economics of supply and demand. The market is booming in Asia. Demand has grown to be worldwide but the supply can’t be increased, so that is why you see an exponential increase in wine prices,” says Angelina Teh-Leong, a broker with Singapore’s Premium Liquid Assets in Hong Kong.
Anthony Hanson, from Christie’s, who believes, despite the risks, that fine wine remains a good investment option, with the recent depreciation making it a buyers’ market, shares her optimism. “The market has softened but there is still strong demand for the top bottles. The best wines are still selling really well.”
Christie’s held an auction in Hong Kong in November 2008 where it closed some US$4 million (HK$31m, RMB 27.3m, S$6m) in sales, including rare vintages from Chateau Latour’s cellars.
Wine auctions in the city by rivals such as Bonhams and Acker Merrall & Condit in the first half of 2008 achieved record results, before demand eased off in the second half. Auctioneers remained positive.
Patti Wong of Sotheby’s Asia’s says, “We have seen a steady increase in the number of Asian clients participating in our sales in New York and London. Over the past few years, there has been demand from a much larger Asian client base and active buyer activity across a much broader spectrum of wines.
Sotheby’s is optimistic and confident in the long term prospects and development of the wine market in Asia, particularly the growing demand in the fine wine market in China, given the very favourable environment in Hong Kong after the tax exemption. Against the current financial backdrop, we have been very conservative with our estimates. This is an excellent opportunity for collectors to acquire some prized bottles, especially in large formats, of impeccable provenance. These will only get rarer.”
John Kapon of Acker Merall & Condit adds, “The Hong Kong Government’s exemption of wine duty to zero in 2008 has given a great boost to the market and helped foster a stronger wine culture in Hong Kong. Hong Kong is now well positioned in the marketplace to become the wine hub in the Asia region. As the world’s leading wine auction house, we are fully committed to helping Hong Kong to achieve this status.
My views on the auction environment are that it will remain healthy – interest and activity in Hong Kong have remained strong, and demand for the finest wines should remain stable, even if prices have come down from the highs of 2008. Macau will remain an important market, and China will continue to grow although it needs to lower the taxes on wine for it to become a more important factor in the market.”
Sotheby’s April auction will showcase some 9,000-bottles including top Bordeaux wines like Margaux, Lafite, Petrus and Mouton Rothschild. Some 1,500 bottles of Domaine de la Romanee-Conti will also be sold including all 7 of DRC’s vineyards, with over 10 vintages of each of the following vineyards: Echézeaux, Grands Echézeaux, Richebourg, Romanée St. Vivant and Romanée-Conti; 7 vintages of Montrachet; and over 20 vintages of La Tâche.
Acker, Merrall & Condit will return to Hong Kong for its Auction III series on 28th March 2009 at the Island Shangri-La Hotel. Highlights of this forthcoming auction include 5,800 bottles mainly from the cellar of fine and old wines collector, Robert Rosania. This auction will also feature Domaine de la Romanée-Conti, with a superlot of 132 bottles of DRC La Tache from the best 11 vintages between 1985 and 2003 and 21 magnums of vintage 2003 from all the great vineyards of Domaine de la Romanée-Conti, including Échezeaux, Grands Échezeaux, La Tache, Richebourg, Romanée Conti, Romanée St. Vivant and Montrachet. For more information, please see www.ackerasia.com or email Ms. Victoria Cheung at victoriacheung@netvigator.com.
Sotheby’s Asia will following with its wine sales on 4th April 2009 at the Convention and Exhibition Centre. For more information, please see www.sothebys.com or email Ms. Flora Tse at Flora.Tse@sothebys.com.
Not to be left out, Bonhams too will return to Hong Kong with a scheduled auction at the Island Shangri-la Hong Kong Hotel in May 2009. For more information, please see www.bonhams.com or email Daniel Lam at winehk@bonhams.com.