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Visitors to last month's Hong Kong International Wine and Spirits Fair sample wine. Sales of wine have exploded in China, where the wealthy view it as a symbol of status and of being Western, modern and cool.
With its explosive economic growth, China is sucking in many of the world's major commodities such as metals and minerals and — perhaps most surprising — red wine.
Traditionally, the Chinese are not wine drinkers. But as the middle classes earn more money, it seems they are developing a taste for Bordeaux.
It's auction time in Hong Kong. On a recent day it's not Impressionist art or antiques on the block; it's wine.
At Christie's wine auction in Hong Kong last month, a case of 12 bottles of Chateau Lafite 1982 sold for roughly $90,000. Auctioneer David Elswood says the same case would have sold for about $10,000 just five years ago.
Venerable British auction house Christie's is selling a case of what has been called the classiest wine in the world: Chateau Lafite 1982. With bidders on the phone, online and gathered in the cavernous auction room, the hammer of auctioneer David Elswood finally falls. The final price — including a 20 percent buyer's premium — is roughly $90,000 for 12 bottles of wine.
Elswood admits the market has gone mad.
"Five years ago, a case of that Lafite '82 would have gone for about $10,000," he says. "Ten years ago, for maybe $3,000 or $4,000."
Market's 'Meteoric Rise'
Robert Sleigh of the rival auction house Sotheby's recently moved here from New York, reflecting the commitment of the major auction houses to the Asian wine market. Sotheby's statistics back up those of Christie's, Sleigh says.
"It has been a meteoric rise. We'll now sell over $50 million worth of wine this year in Hong Kong," he says. "That's almost double our total in London and New York combined."
Part of the reason for the boom in Hong Kong has been the recent abolition of a 40 percent import tax, which has simply made it cheaper to import wine to the former British colony.
The other main factor, though, has been the growth of the market in mainland China, and the Chinese business custom of giving face to important clients by providing extravagant gifts.
"At top-level meetings, if you're not putting a bottle of Lafite on the table, you're not just not giving enough face; you're in danger of offending your client," says Doug Rumsam of British wine importers Bordeaux Index. "That's why it's a necessary commodity."
Considered Cool, Modern And Western
Up the China coast in Shanghai, they may not be buying Chateau Lafite, but members of China's burgeoning middle class are starting to drink wine.
At a wine tasting presented by a group of French winemakers from Bordeaux, Chinese buyer Elaine Xu, sums up the red wine trend in one important word.
"Lifestyle," she says. "It's a lifestyle thing. When people have money, they want to improve their lifestyle and their quality of living."
Beside her, 28-year-old Michael Xu is gently cradling a glass of red wine. He is part of the newly globalized Chinese middle class, working on a cruise ship that travels around the world.
"Younger guys, like me, we think it's cool, it's Western and very modern to drink wine," he says.
Wine Producers' Salvation
The room is busy with young Chinese people tasting the French wines, and they're not the only ones who are happy.
Marie Helene Leveque is one of the owners of Chateau Chantegrive, a small chateau in Bordeaux, which has recently been struggling as a result of the global economic crisis. The decline in the U.S. market and the slowdown in consumption in France have both dented her chateau's bottom line.
But now there is hope, she says.
"China is the salvation of our chateau," Leveque says. "Six years ago we had no sales in Asia. Now, China and the rest of Asia make up 30 percent of our sales."
Of course, there are 800 million people in rural China who are struggling to make ends meet, never mind differentiating a Bordeaux from a Burgundy.
But the pool of potential future consumers is enormous, says Rumsam, the wine importer in Hong Kong.
"There's a huge wealth creation going on," he says. "There's a following of top brands, there's a perception that fine wine is civilized and can be used in business transactions. Therefore, as long as you bet on China, you'd have to bet in the short to medium term that we've only just seen the start of it."