Hong Kong investors see wine as good bet for capital growth

Having witnessed tumultuous times for the stock and property markets in the financial crisis, investors now see fine wine as a relatively low-risk, cheap investment which guarantees long-term returns.

“We can easily buy HSBC shares because they will always be available on the market,” George Tong, a wine connoisseur-cum-investor and toy company owner, told AFP.

“Fine wine, on the other hand, is something that cannot be replenished. Its value is bound to rise.”

“Every time someone opens a bottle of 1982 Chateau Lafite-Rothschild, the rest of the world is deprived of one more,” he said, referring to one of the most sought-after vintages.

The strongest impetus for investors came from a surging demand for imported wine in China, which has seen breakneck growth in personal wealth boosted by the government's four trillion yuan (US$585 billion) economic stimulus package last year.

In China, top-echelon vintages can be a status symbol for the super-rich as well as a powerful tool for building business relationships.

“You have to appreciate it from a cultural point of view. Chinese people show you how much they value you from the type of wine they serve you,” said Carson Chan, managing director of auction house Bonhams Asia.

“In order to return the respect, you must serve them wine of the same caliber.”

Chan said the wealthy and the rising middle class in China are becoming increasingly knowledgeable about Western wine, and their hunt for quality brands would eventually widen from the current focus on the well-known Bordeaux region in France.

He said that fine wine would become an increasingly common investment for people in Hong Kong and elsewhere in the region.

Xavier de Eizaguirre, president of Vinexpo, the world's biggest wine and spirits exhibition, has predicted that China, one of the ten biggest wine consumers in 2008, would be ranked number seven by 2012.

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