Malaysia Wine Market Post Double-digit Growth

UNLIKE consumer goods generally, the consumption of quality wines in Malaysia is not expected to be much affected by the global economic downturn.

Irrespective of the state of the economy, regular wine drinkers are still consuming it due to health and other reasons, although some may switch to relatively cheaper ones.

 “The local fine wine market has been growing by double digits and consumption has also picked up compared with other spirits like whiskey and brandy,” said Asiaeuro Wines & Spirits Sdn Bhd chairman Datuk Adrian Loh in an interview.

“The younger generations are also into wine drinking as many of them took up this passion when studying abroad.’’

Many also consume it because it is believed that red wine promotes good health, he added.

Recent studies have indicated that some brandy, whiskey and beer drinkers are slowly switching to wine for its taste while other wine lovers who are financially constraint by the economic crisis may switch to cheaper wines which are readily available, according to Loh.

In Malaysia, at least 95% of the wines bought is for consumption instead of investment.

AmoNg the large variety of wines in the local market, those imported from Australia form the biggest market – 40% to 50% – followed by French, Chilean, European and South American wines.

Asiaeuro Wines is a leading importer and distributor of wines in the country.

Several factors, namely efficient transportation, proper storage, vast business networking and a strong distribution network, had enhanced the company’s competitive edge, Loh said.

IMported wines are transported in refrigerated containers and upon arrival, are stored in proper warehouses and chillers to preserve the quality.

In terms of networking, he said the company had a close business relationship with wine growers in France and distributors in Britain and other European wine-producing nations.

Loh said in the last few years the company’s sales had been growing by double digits.

Its main customers include corporations, leading hotel and restaurant chains and high net-worth private individuals.

Regular wine-tasting sessions as well as wine dinners co-hosted by leading wine producers are organised periodically for the regular customers of the company.

Headquartered in Sunway Damansara, and with offices in Kota Kinabalu, Sabah and China, the company has been in operation for 10 years.

Asiaeuro Wines, which has an office in Shenzhen, China, is looking to penetrate region countries especially Vietnam and Cambodia.

“For us, the largest foreign market is potentially China due to growing demand for fine wines. Vietnam and Cambodia, due to its French heritage, is also a lucrative market for wine,” said Raymond Choy, the general manager of Asiaeuro Wines.

“We will, this year, make inroads into the Vietnam and Cambodia markets through our sales and marketing agents. The target market segments include corporates, hotel and restaurant chains.’’

Another market segment which Asiaeuro Wines is looking at is wines as personal and corporate gifts.Choy said this market was also growing rapidly as more parents reward their children with fine wine of the same year as the child was born as gifts for their birthday or upon reaching a certain age, for example their 21st birthday.

More companies were also buying wines for their staff and valued customers on special occasions, he noted.

Wine as an investment is still at an infancy stage in Malaysia as many are unaware of the potential and value of wine investments.

“Fine wine currently is the best performing investment in Britain as well as being highly lucrative, the profits achieved for wine portfolio is also tax free and free from market volatility and less risky compared to other asset classes,” Choy said.

Some of the best invested wine brands are Lafite Rothschild, Haut-Brion, Latour, Mouton Rothschild and Margaux, all of which are from Bordeaux, France.