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Burgundy Powers Ahead in Asia

Japan sparked Far East Asia's love affair with Burgundy
© AFP | Japan sparked Far East Asia's love affair with Burgundy
Hong Kong wine market is "sluggish," but Burgundy is on the rise.

It's been a long time coming, but Burgundy is now giving Bordeaux a serious run for its money in Asia.

For many wine lovers in Hong Kong, the wines they are now drinking and enjoying with friends are from Burgundy. Gregoire Bourrut Lacouture, of Connoisseur Wines and Spirits, shares his recent experience: “At a dinner a few months ago between wine lovers, all the guests were supposed to bring a very nice bottle to share. All but one brought top Burgundies and one person brought a 1982 Bordeaux. At the end of the evening, all the Burgundies were finished but the 1982 had wine left over.”

His experience is similar to mine. Over the past 18 months, I have had at least one request a month from various private and educational entities in Asia to lead a masterclass on Burgundy.

Of course, the Far East's interest in Burgundy is not a recent phenomenon: the Japanese manga comic "The Drops of God" triggered a Burgundy cult following in Japan which started in 2005 and spread to the rest of Asia over the following several years.

In Korea, many merchants point to the influence of the book during the boom years of 2006 through to mid-2008. The Korean translation was on the best-seller list in book stores and flew off the shelves of wine shops across Seoul.

The manga conveys Burgundy as the epitome of good taste, complete with stunning visual images for different appellations as well as for specific wines. Although Burgundy has attracted Japanese wine lovers for as long as Bordeaux, it was the manga that made Burgundy more accessible and understandable to the occasional wine drinker in Japan. Images of a beautiful woman standing in the midst of wild spring flowers in full bloom to describe the wines from Musigny, for example, would allow people to link images with flavors and taste, and most, importantly, visualize the experience of tasting a great bottle.

Reviewing figures from the Bourgogne Wine Board (BIVB) for exports to Japan over the past 12 years, there is an interesting correlation between the popularity of "The Drops of God" and Burgundy sales. Burgundy exports to Japan grew steadily from 2004 till 2009 when there was a dip because of the financial crisis. Growth charts for the manga comic are identical!

Now that the Japanese economy has rebounded there is renewed enthusiasm for Burgundy. Japan looks set to overtake the U.K. in terms of Burgundy imports by value; at present it is third for both value and volume but it is moving quickly up to second place in value, representing 34 percent of total French wines imported into Japan.

Auctioneer Simon Tam oversees the Henry Tang auction; a scene from "The Drops of God"
© Christie's/Vertical | Auctioneer Simon Tam oversees the Henry Tang auction; a scene from "The Drops of God"

The BIVB reports that Asia is "powering ahead." The traditional markets – the U.K., U.S.,AND Japan, remain the "bedrock outlets," but China and Hong Kong now represent a "significant share" of exports, accounting for 6 percent of sales in the first eight months of 2012, compared to less than 1 percent over the same period in 2007.

With Hong Kong and China together representing the fastest growing market for Burgundy, Japan is now competing with its neighbors for allocations. What has turned consumers on to Burgundy is spiraling Bordeaux prices coupled with a surge in the number of Burgundy importers and mature Burgundies on offer at auctions.

Wine auctions in Hong Kong devoted to Burgundy, such as the successful Henry Tang sale in March 2013, have added fuel to the fire. The 800 lots of Burgundy amassed by Tang over the past several decades achieved US$6.2 million in sales, including six magnums of 1995 Romanée-Conti that sold for $155,000.

At other auctions, direct consignments – such as those from Domaine Dujac and Domaine Roulot at an Acker Merrall sale in January – have encouraged fine wine buyers to look more closely at Burgundy. French reaction to the purchase of Château Gevrey-Chambertin by casino magnate Louis Ng last year also piqued people’s interest, who were curious to understand what all the fuss was about.

Since 2010, both sales and volume of Burgundy exports to Hong Kong have been on a steep upward curve. China, including Hong Kong, is now the fourth-largest export market for Burgundy, just behind the U.S., U.K. and Japan (which together make up about half of all exports of Burgundy).

A sign of greater focus on Far East Asia is the decision by the BIVB earlier this year to move its offices from Singapore to Hong Kong. While Singapore may have been ahead of Hong Kong in its enthusiasm for Burgundy, Hong Kong and China are becoming much more important and larger markets. For producers, the China/Hong Kong market for Burgundy provides a good contrast with the U.S. market. While the U.S. favors white wines by a ratio of 60 to 40 – with reds declining in popularity – the figures for China/Hong Kong show the reverse.

A Japanese diplomat unloads a bucket of grapes in Volnay
© AFP | A Japanese diplomat unloads a bucket of grapes in Volnay

Jeremy Stockman, trading director and fine wine manager of Watson’s Wine, says that while Bordeaux still represents the larger share, “Burgundy wines are now a significant and growing part of our business. The awareness and demand for Burgundy among our customers has grown significantly.” He cites a number of Burgundy domaines whose popularity have shot up in recent years: Liger-Belair, Leflaive, Meo Camuzet, Roulot, Pierre Yves Colin Morey, Domaine de la Vougeraie, Château de la Tour, Barthod, David Duband, Fontaine Gagnard and Sauzet.

At the same time, the current sluggishness of the Hong Kong wine market is a cause for concern. Lacouture, who represents Domaine Drouhin, says overall wine sales have dropped about 20 percent and the category most affected has been the high end. He reports that while villages and premiers crus are stable, the grand cru wines, which once flew out the door and were on allocation, are selling less well.

Others, including Stockman are less worried. “While the market has been a little sluggish of late there is still growing demand and Burgundy continues to do well," he says. "Looking at the past three short vintages of 2010, 2011 and 2012, followed by another short vintage in 2013, demand will outstrip supply for many of the top domaines.”

Related story:

Vineyard Life Unchanged By Chinese Buy-Out


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  • Comments

    devinxu wrote:
    31-Aug-2013 at 09:10:18 (GMT)

    In China, also more and more wine lovers prefer to Burgendy

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