Everyone in the wine trade I saw or spoke to after VinExpo Asia 2012 seemed exhausted. The wine show was packed with producers and dealers and everyone was talking business. Yet, I am not sure how much actual business was done. (Photo is a post-VinExpo office party.)
The official figures were more than 15,000 attendees and 1,050 exhibitors from 28 countries. As I wrote before, the Hong Kong event is a smaller, more up-market version of the semi-annual event in Bordeaux.
The bottom line is that people are worried about the global economy, and even though the Chinese wine market looks bullish, concerns are building regarding the high-end wine market – particularly the first growth market. “My customers realize that wines such as Lafite are overpriced and are considering other names,” said a Chinese wine merchant I had dinner with over the weekend.
Nonetheless, he also told wondrous stories of businessmen drinking cases of Domaine de la Romanée-Conti at lunches to close multi-million dollar land deals.
Auction houses also tell of similar drink fests and report tens of millions of dollars in sales with 100 percent of lots sold. Yet they forget to mention that a significant percent of those sales are never paid for.
Even some Bordeaux chateaux said they sold their 2011 en primeur in less than 24 hours, although they failed to point out that the negociants who ordered were having a hard time selling the wines. And I have to wonder how many 2011 orders will be cancelled when payment is due later this summer.
Why would anyone buy 2011 en primeur with the imminent collapse of the Euro pending? I can’t see how 2011 will be more expensive in two years.
Yes, there were lots of conversations last week in VinExpo. It’s just difficult to figure out the whole truth – forget about predicting the future.
comment: James-
Softness in Bordeaux (and most high end markets)is likely to be predicated upon perceived or real economic weakness throughout Europe and China. Ironically, the US is now the "best" house in a bad neighborhood, as well begrudgingly recover!
The looming question for the world is how Europe (with its 27 member countries) will address their rapidly escalating economic crises. If they can learn from the errors and successes of the US during its fiscal debacle, there may be hope for a more contained recession and eventually an economic rebound, similar to what we see today in the US. Even so, with four years of weakness now under our belts in the US, we're still struggling. If we're to follow this path of recession and recovery, it says that Europe, at best, has a few years of real tough sledding. In turn, this will impact China and the discretionary markets for high end
items such as art, jewelry and wine.
Just one person's thoughts..............Not wise to ignore history......
Be well and continue success as your grow this new "child."
Jim