How is wine holding up as an investment in the face of wobbly markets? What are some of your recommendations?
ItÆs true that weÆve seen prices soften in recent months. However, this has also had the positive effect of creating a buyerÆs market. We are seeing older vintages hold their value, and people are discovering some fantastic wines, which have previously been unavailable, in decent quantities at very reasonable prices. ItÆs also worth remembering that while the price of wine is not necessarily immune to market forces, the quality of the wine itself is not affected. Ultimately there are some great opportunities for those entering the market for the first time. Some examples include: 1996 Ch. Margaux, Margaux, Bordeaux (HK$6,850 per bottle); 1996 Ch. Latour, Pauillac, Bordeaux (HK$9,826 per bottle), and 1982 Ch. Haut Brion, Graves, France (HK$9,280 per bottle).
What would you stay away from these days?
I think that itÆs best to stay in France at the moment, and particularly in Bordeaux which has historically always been the strongest market. The rule of buying the best vintages from the best producers still applies in the current climate. ItÆs best to stick with producers who have a proven track record and avoid the hyped wines from boutique garage producers, which may not hold their value so well.
Are people buying less? Or cheaper?
People are still buying, but we have seen spending habits change, with an emphasis on less expensive wines. The effect of this is that customers are also being more adventurous, looking at less well-known regions where there may be better value for money. This is, of course, the key role of the wine merchant û to give customers great value regardless of the price level at which theyÆre spending.
Since the Hong Kong government reduced the levy on wines, it seems some wine prices have dropped, but not all. Why is that?
There are several reasons why we havenÆt seen a dramatic fall-off in prices (although BB&R reacted to the reduction of taxes with an immediate drop of 22% on the cost of our wines). Many merchants have historic stock, which they must work through before reductions in price will be evident, and the fluctuation in global currencies has not been to everyoneÆs advantage. It is also the case that some restaurants have been unable to pass on the savings to customers due to other fluctuations in the market (for example the price of pork).
Ultimately it is unreasonable to judge the governmentÆs decision to reduce the tax just nine months on. This is a decision that will have a positive long-term effect on the industry and on Hong Kong as it positions itself as a global player in the wine world.