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May 25, 2016

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Wine merchants upbeat as expo gets under way

A SLOWING economy and a corruption crackdown had led to concerns that China’s wine boom had gone bust, but there was renewed optimism at a Hong Kong wine fair yesterday as the mainland develops more affordable drinking habits.

The three-day annual event Vinexpo is held alternately between Bordeaux and Hong Kong, with the latter providing a gateway to the Chinese market.

China’s wine consumption rose 70 percent between 2009 and 2013 to 1.9 billion bottles and, three years ago, China overtook France as the world’s largest consumer of red wine.

At the last Hong Kong edition of Vinexpo in 2014, fears were growing that anti-corruption measures were slowing consumption, particularly because the popular mainland practice of offering expensive wines and spirits as gifts was no longer acceptable.

According to a report by Vinexpo, China consumed 7.2 million fewer cases of red wine last year than in 2014.

But the fair’s Chief Executive Guillaume Deglise said the good times are back, thanks to a growing middle class buying cheaper plonk.

“We have come back to Hong Kong with more confidence. In 2014, there was a lot of uncertainty over the austerity policies and the economic situation was not ideal,” he said.

“The market has matured, and it is not only about the Grand crus. Consumption has increased with (wines) starting at a lower price,” Deglise said.

“It is not only about luxury products given as gifts from buyers. It is real consumption.”

Expansion will continue due to growing consumption by lower spenders, but it will be slower than before, according to the Vinexpo report.

The previous bubble was also fed by overly inflated prices, which have since come down, says Hong Kong-based wine expert Jeannie Cho Lee.

Lee was the first person from Asia named as a “Master of Wine,” a title given to those who pass a notoriously tough exam run by the London-based Institute of Masters of Wine.

“The reason the price went so high was not because consumers were buying so much wine, but because the importers were overly optimistic, surpassing real consumer demand,” she said.

Deglise said Hong Kong is increasingly the gateway to other Asian markets, not only China.

About 17,000 trade visitors are expected to visit Vinexpo, where 195,000 bottles of wine are set to be opened.


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