“Do mainland investors really know about red wine? Or do they just treat is as a speculative tool?”
Paulo Pong Kin-yee, a Hong Kong-based fine wine connoisseur and investor, poses this question in an interview published on Metro Daily on Monday, as he notes that many wine traders across the border went bankrupt when the global prices of the tipple plunged in 2011.
China was responsible for the market’s surge in the previous years, as the demand for luxury goods rose along with the swelling of the ranks of the country’s new rich. It was also behind the market’s precipitous decline.
By comparison, buyers in Hong Kong appear to be gaining more knowledge about red wine, Pong was quoted as saying. Since Hong Kong scrapped the wine equalization tax in 2008, the city has seen its red wine industry grow steadily, raising its potential to become a global red wine hub, he said.
In more than a decade prior to 2011, prices of luxury red wine, such as vintages from France’s Chateau Lafite, were growing as much as 30 percent annually. But in 2011, Lafite prices fell 45 percent from their peak while other high-end wineries saw their prices drop 25 to 30 percent.
As a result, many mainland red wine traders recorded huge losses or even went bankrupt.
“Fortunately, I did not have a lot of inventory in China at that time,” the managing director of Altaya Wines Ltd. told the newspaper.
Altaya, which represents more than 100 top wine brands, has decided against expanding too quickly in the market. It currently keeps its mainland operation to supplying a few distributors there.
Pong, 37, is the grandson of the late Hong Kong steel magnate Pong Ding-yuen and the son-in-law of New World Development (00017.HK) chairman Henry Cheng Kar-shun. He founded his wine trading business 13 years ago.
Altaya Wines’ annual revenue is about HK$500 million, growing about 8 to 9 percent annually.
He was named one of the most influential persons in the global red wine business by industry magazine Decanter.
Pong started building his restaurant empire in 2006 and is now running 16 restaurants in Hong Kong, the report said.
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