In one of its grimmer estimates, Liv-ex, the London-based fine wine trading platform, warned that with China’s sagging economic growth and political uncertainties, its allure for global wine merchants has dimmed and the country “will not be riding to the rescue of the global wine trade in difficult times ahead”.

Fine wine investment in Asia Pacific region has been greatly diminished, impacted by China’s stringent zero covid policy and political uncertainties, as President Xi Jinping secures a third term. The continued border closure with Hong Kong, its biggest supplier of fine wine, is described as “undoubtedly the main reason” why wines traded on secondary market have suffered a substantial hit this year.  

As a result, the view on China today seems more grounded, writes Liv-ex. “Many who tried their luck in China in the early 2010s found their hopes disappointed. As many have noted, it was and is a market for those taking a long-term approach,” it continues.

Since 2010, greater China has remained important for global wine market, but China’s ensuing anti-corruption clampdown and more recent collapse of Australian wine exports due to its over reliance on China have shown that “the wine world is no longer as star-struck” by the country,” writes Liv-ex. Therefore, “the time for other Asian markets to shine has come and, perhaps, for a new cycle in Asia to begin.”

Other Asian Markets

One of the big winners emerged out of China and Hong Kong’s loss is Singapore, according to Liv-ex.

“Singapore may not be at the door of mainland China, but it is a key hub for the growing base of collectors in south-east Asia. Its own currency is also tied to the US Dollar which gives it a powerful boost at this critical moment,” it writes.

Japan has been a consistent and valuable market for Burgundy and Champagne, while South Korea has emerged as one of the fastest developing markets for fine wine.

Trends

Bourgogne wines enjoy bullish demand in Hong Kong (pic: BIVB)

Bourgogne wines (pic: BIVB)

As fine wine trading in Asia’s secondary market broadens and diversifies, the most obvious trend that happened in the market was the decline of Bordeaux and rise of Burgundy.

At the very height of the demand for Bordeaux in 2011, the region accounted for 95.2% of secondary market trade in Asia.

However, since then (and in line with other global markets) demand for Bordeaux has waned. Today it accounts for just 35.9% of Asian demand (as of 30th September 2022), notes Liv-ex.

The big beneficiary of this change has been Burgundy, which has risen from less than 5.0% of buying in Asia a decade ago, to 37.3% so far this year.