Wine industry blossoms in Hong Kong

In 2004 a businessman named Jim Thompson leased a set of old munitions bunkers in Hong Kong and converted them into wine cellars.
It was a bold move. Few East Asians then had a taste for fine wine, and Thompson’s firm, Crown Worldwide Group, was accustomed to the steadier business of shipping expatriates’ furniture around the globe.
But Crown made strenuous efforts to seduce potential customers with lavish tastings and other jolly social events. The venture grew steadily until, four years later, the bunkers had 100,000 bottles in store.
All this was despite a heavy sales tax that suppressed demand for wine in Hong Kong. In early 2008 that tax was cut to zero. Since then, 400,000 more bottles have been crammed into Crown’s bunkers, filling them to the brim and forcing the firm to build a vast new warehouse.
The zero tax rate has attracted big auction houses to the wine trade in the ex-colony. David Elswood, the top wine man at Christie’s, says that Hong Kong has become more important than New York and London combined.
At a Christie’s auction on Sept. 17 and 18 record prices were established for 20 wines. Another auction house, Acker Merrall & Condit, had a similarly successful event this month. Eight more auctions will be held between now and Christmas.
Although most of the new demand has a mainland-China connection, there have been buyers from South Korea, Japan, Indonesia and Thailand, all of which still tax wine heavily. Moving wine into these countries would be costly. But for many buyers that is beside the point. They are buying to invest, not to imbibe.
 From The Economist 

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