Why Hong Kong's fine wine 'free trade zone' is now spilling online...
We look at how Hong Kong's low wine duty and the power of the web are creating a fine wine boom
"It's a free-trade zone for wine" in Hong Kong at the moment. So says Anthony Mak, managing director of the Modern Wine Cellar, the "foremost" fine wine buying and selling company in the region.
As quoted by Bloomberg, Mr Mak is referring to the Chinese government's cutting of its wine duty from 40% in February 2008.
In subsequent years, many wines that were once stored in European cellars have now migrated over to Hong Kong - one of many factors leading the region's fine wine boom.
A result is that more than 15 wine repositories like Modern Wine Cellar have now been set up in the region. They are highly-secure, with facial recognition scanners being among their many gadgets.
Meanwhile, in terms of market values, much-loved Bordeaux wine vintages are selling for thousands.
"Half our customers are Chinese," Thomas Shum, manager of repository The Cave recently set up near the Chinese border, told Bloomberg.
Bottles of the 1982 Chateau Lafite Rothschild, for instance, are being valued at $12,000 per bottle. Even bottles with questionable provenance routinely sell for $500.
Such values are being bolstered by increasing numbers of auctions across Hong Kong's glitzy hotels. And, according to the Wall Street Journal, the battle for the hearts, wallets and cellar space of the region's wine lovers isn't restricted to the saleroom floor...
Hong Kong's wine lovers are also turning to the internet, furiously bidding for favourite vintages including Chateau Lafite Rothschild.
If you're a regular reader of Paul Fraser Collectibles you'll be a aware that this is boosting business for Western wine auctioneers. The likes of Acker, Merrill and Condit and Spectrum are among the beneficiaries of Hong Kong's enthusiastic buyers.
Spectrum's major successes include $77,675 for a case of Lafite 1982 in June, while cases of other coveted vintages like Bordeaux's Chateau Latour have brought anywhere from $1 to $10,000.
Thousands of bidders are taking part, and the sales' online nature means that constant 24/7 flow of wine can be supplied to the global markets.
Not surprisingly, sellers and buyers of fine wine are favourite the online model because it is quicker, easier and more cost effective.
Meanwhile, with Spectrum's place to unleash an Apple iPhone application designed specifically with the purpose of bidding in its sales, Hong Kong's wine boom is set to go from strength to strength.
Watch this space for upcoming news on the fine wine markets.
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