US Commerce Secretary Gary Locke and Hong Kong Commerce and Economic Development Bureau Secretary Rita Lau signed a Memorandum of Understanding (MOU) today to facilitate sales of US wines in the booming Hong Kong market through promotion of wines and wine-related tourism, wine appreciation, investment in infrastructure and customs cooperation against counterfeits and smuggling.
2009 global imports of wine into the Hong Kong market increased 44% by value to $491 million and 20% by volume to 32.4 million liters over 2008, according to the USDA Foreign Agricultural Service (FAS). US gross exports grew to a record $40 million, an increase of 138%, making it the 4th largest suppler of wine into Hong Kong after France, the UK (mostly investment-grade auction sales) and Australia. In terms of retained imports by value (Hong Kong re-exports about 19% of wine to China), the US has quickly overtaken Australia with a 10% market share. Both France and Australia have similar MOU’s with Hong Kong and today’s agreement with the US is expected to continue its momentum of success.
Hong Kong is an important and lucrative market for global wine producers given the greater proportion of higher margin bottle sales vs. bulk sales and also, per the FAS, 94.5% of gross imports by value are red wines. The three most popular red grape varietals are cabernet sauvignon, merlot and syrah, with cabernet sauvignon accounting for about 50% of total red wine sales. This makes Hong Kong an attractive market for premium wine regions such as Napa Valley.
Hong Kong imports are expected to reach $600 million and 35 million liters in 2010, of which US exports are expected to reach $60 million, a surge of 50% over 2009.