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Opportunity knocks for distributors

As an established Hong Kong-founded independent distributor of wine, Jebsen Fine Wines (JFW) is well placed to comment on the usefulness of Vinexpo Asia-Pacific for the wine industry.

'We work with 140 partners [wineries] and 20 will be here at Vinexpo,' says director Gavin Jones. 'Getting together en masse helps us to understand how we are operating in Hong Kong and [the mainland].'

Jones says that Hong Kong is the best location for Vinexpo Asia-Pacific because when it was hosted by Japan, it became too localised to the Japanese market. 'Hong Kong is also close to [the mainland], which gives everyone opportunities,' he says.

Hong Kong and the mainland have both seen wine import figures surge, so the task of distributing wine in pristine condition becomes more challenging. After Hong Kong eliminated duty on wine in 2008, net imports of wine jumped to 2.6 million cases the same year - up from 1.9 million in 2007 - and 2.9 million cases last year.

With such a volume comes the test of large-scale transportation and storage. Wine is sensitive to movement and climatic conditions. JFW ships well-packed bottles under temperature-controlled conditions to its professional storage facility in Hong Kong and uses its sister company, Jebsen Logistics, for delivery.

'The weather is still a challenge,' Jones says, 'and so is transport by road in a built-up environment.'

JFW's storage facility here has been awarded a Wine Storage Management certification from the Hong Kong Quality Assurance Agency, after an onsite audit of its conditions and operating methods.

At the top tier of fine wines, in the growth category, Hong Kong has put itself on the map for strong collectors, with help from Taiwanese and mainland buyers. The most reputable wine auction houses, Bonhams, Christie's and Sotheby's, hold regular auctions.

'Hong Kong looks like it will replace London as the most active wine auction location,' Jones says, 'with New York remaining in first place. Our main goal is branding. We are an agency business specialising in [growth].'

While JFW competes in growth markets on the mainland, holding a list of leading Bordeaux chateaux top vintages and iconic wines such as Penfolds and Champagne Bollinger, its core branded wine business presents more widely affordable wines and even invests in some wine production itself, such as Sacred Hill in New Zealand, Twinwoods Estate in Margaret River, Australia, and Santa Mia in Chile.

Several of the JFW wines are boutique productions.

Established in 1990 in Hong Kong, JFW also has offices in Macau, Guangzhou, Shanghai and Beijing. Mainland distribution has its own set of challenges, Jones notes. 'There are rigorous import duties and [additional] labelling requirements - Hong Kong usually carries a standard label. In China, a back label in Chinese with other data is necessary,' he says.

Mainland consumption volumes will grow, Jones says, making such efforts worthwhile.

Hongkongers enjoy wine from a variety of regions. 'In young markets, France dominates - and we can see that in China,' Jones says. 'In Hong Kong's market, French wine makes up about one third of imported wines, followed by Australian - preference is very strong for these; wines from the United States, Italy and Chile are also popular.'

VerdeOr, a wine distributor specialising in top-of-the-line wines from Tuscany, is also taking part. Established last year, it is headquartered in Florida, with offices in Hong Kong and Taiwan. Through research of wineries, comprehensive wine tastings and attending VinItaly, the annual exhibition of international and Italian wines and spirits in Verona, VerdeOr has selected prestigious wines from Tuscany for export.

'French wine used to dominate the Hong Kong market reaching very high prices,' says Jasmine Munoz, head of business development at VerdeOr. 'Local dealers are now looking for a more affordable price but yet still high quality. And it's no secret that 'made in Italy' is a brand that the general market appreciates.' Munoz also says that being a specialist wine distributor puts them in a good position to tap Asian investors looking to invest in rare labels: 'Many wine connoisseurs in Hong Kong see wine as an expression of high style, as well as an investment.'

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