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Hong Kong “more engaged” with wine but exports to China go flat

Published:  05 June, 2019

The latest Wine Intelligence report on Hong Kong says after “many years of substantial growth” as the key Asian trading hub for wine, sales have plateaued after China, its biggest customer, established direct trade connections with wine-producing regions.

Since the abolishment of tax duty in 2008, Hong Kong became the “ideal wine trading centre” for Asian markets. China remains Hong Kong’s largest re-export destination for wine with over three quarters of wine imported to Hong Kong bound for China.

But the report says over the “past few years, exports into China have declined significantly. Market experts believe that as China continues to develop and imports wine directly from wine-producing regions, Hong Kong’s role as a redistribution centre is diminishing".

It also said other possible explanations for smaller export volumes could be that wine consumption in China has declined in the past few years.

However, in Hong Kong the report found there was a “substantial change in consumer behaviour amongst Hong Kong wine drinkers” who are becoming “more engaged with wine, with a significant growth in the proportion of those who consider wine to be important to their lifestyles”.

In terms of consumer preference, red wine “continues to dominate the wine market in Hong Kong, with the overwhelming majority of consumers claiming to have consumed the beverage over the past year, driven primarily by older wine drinkers in the category. It appears that there is some potential growth for white wine and rosé as they are no longer considered to be just a summer wine. Sparkling wine is also gaining momentum".

Some 90% of respondents had drunk red wine over the last 12 months, with Merlot the most popular varietal, while 68% drank white wine- up from 62% in 2015, and almost a third of consumers drank rosé - up from 21% in 2017.

Average typical spend in the off-trade increased “significantly” in all off-trade occasions, though on-trade spend remains stable.

French wine has a strong presence in Hong Kong, with 25% of the total wine market share and 47% of market value. However the report also found that New World regions are becoming the “big-growth story of recent years in Hong Kong, with Australia, Chile, Italy and New Zealand growing significantly".

As for brands, Yellow Tail ranked the most powerful brand in the Hong Kong wine market, followed by Penfolds, with Bella and Casillero del Diablo also among the top 10.

The report questioned over 1,800 wine drinkers in Hong Kong between March 2015 and March 2019. It also spoke to representatives from the trade in March and April 2019, including one retailer and one distributer.