Asian Affair with Burgundy
When it comes to fine wine, Asia’s marriage to Bordeaux is uncontested. But in recent years a few cracks have appeared in their formerly blissful marital facade. Asia has been coming home late wearing telltale Chardonnay perfume and Pinot smudges on his collar. There can be no doubt, Asia is embraced in an affair and the mysterious mistress is Burgundy.
Throughout my travels I’ve noticed that Asia’s disparate parts all seem to be falling under the influence of Burgundy’s sensuous call, albeit with some falling harder and faster than others. One only needs to take a peek into some of the region’s most impressive cellars or attend a few cognoscenti’ dinners to discover that a lot of cult Burgundy wines are provoking the palates of Asians. Last year one of the most memorable dinners that I attended was that of a tight-knit group here simply called, “The ‘M’ Club”...a loose excuse for some decadent chaps to get together and drink nothing but Montrachet and Musigny. And headlines such as a six bottle lot of rare 1985 Henri Jayer Richebourg selling at and Acker Merrall & Condit auction for HK$532,400 (US$68,432) to a Hong Kong buyer in May 2009 suggests that this is love at any price. In a effort to get a more precise pulse reading on this passion, since mid 2009 I’ve been asking Burgundy’s wine marketing board, the BIVB, to send me current export statistics to Asia, but to no avail.
Then in December 2009 the BIVB along with twenty producers visited Singapore’s Raffles Hotel to present a trade tasting: Epicurean Burgundy. The event itself was somewhat lacklustre showcasing few genuinely interesting wines. Though well managed, apart from a dozen or gems the content just didn’t quite do justice to the growing interest in Singapore for high-class Burgundy nor did it really help to educate pining consumers. But at least I did get the low-down from the BIVB on the varying states of play for Burgundy in the Far Eastern markets via a newly published report. What’s more Bernard Hervet, Director General of Faiveley and member of the BIVB board of directors, was present as spokesperson and gave me thirty minutes to have a heart-to-heart about Burgundy’s affair with Asia.
“Top producers of Burgundy are convinced that there will become a balance between West and East – Burgundy consumption in all areas of Asia will grow,” Hervet began. “For a while many top producers were fully allocating their wines to the West but now they’re reallocating for the Asian markets. Asian consumers can be optimistic that they will be able to find more top Burgundy wines here. Even at Faiveley we will increase the allocation.” He sighed, pausing pensively, “Burgundy can be slow to change but now they understand.”
And there’s good reason for Burgundy to become increasingly attracted to a potentially lucrative relationship with Asia. According to the BIVB report called “Background Information on Burgundy and the Asian Market”, in the 12 months to end of July 2009, global exports fell 16% by volume and 12% by value. Much of this is attributed by them to the faltering UK and USA wine markets, which have collectively accounted for 50% of their exports in recent years and according to the BIVB, “both of which are feeling the full impact of the crisis, and which accounts for ¾ of the decline in exports from Burgundy.”
From the stats, Hong Kong and China are looking to be the most fervent markets with China showing a whopping volume increase of +26% and Hong Kong showing the precise same value increase. (No doubt all the high-end wines going into China are routed via Hong Kong in order to avoid the daunting mainland duties.) The report comments, “In 2008, China became Burgundy's 13th export market by volume (26th in 2007) with 0.7% of volumes sold outside France (versus 0.2% in 2007) and 0.5% of the region's export revenues. China offers strong prospects and should quickly join Burgundy's top 10 export clients.”
Meanwhile the impact of the financial situation on South Korea is clearly demonstrated in their sobering figures: -40% and -42% by volume and value respectively. The report goes onto say, “In Asia, despite an average fall in sales of Burgundy wine of 20-30% on these markets (excluding Japan) it would appear that exports could return to similar rates of growth when the economy recovers. The only mature market in Asia, Japan remains a favourable destination for Burgundy, with exports remaining relatively stable, despite the economic backdrop.”
Burgundy certainly has cause to feel confident about Japan’s devotion. Japan is by far their largest export market in Asia and third biggest global export market after the UK and USA, respectively. As if maintaining market share wasn’t enough proof of loyalty, during that peak financial crisis period of mid 2008 to mid 2009, exports to Japan showed miniscule declines of just -3% by volume and -5% by value.
The extract previously mentioned from the report attributes the strength of the Japanese interest to the fact that it is “the only mature market in Asia”, but I would argue that Singapore at least is also a relatively mature market demonstrating less fervent figures for a reason to which Hervet alluded. For many years it has been extremely difficult for Singaporean and other Asian country importers to get allocations direct from Burgundy wineries that had eyes only for the west. That is not to say that Singaporeans have little interest in Burgundy. On the contrary, a stroll around wine shops and restaurant lists will attest that a lot of very fine Burgundy is being consumed here. These Burgundies have however mainly been purchased via brokers, many of them located in the UK (no doubt boosting in-part that UK import figure).
I asked Singapore’s Lee Chee Wee, Burgundy expert and part owner of Vino Cave, a fine wine importer / distributor representing mainly small family domaines, about this situation and if it’s changing. “It was bit difficult to get a good allocation from the top Burgundian domaines in 80s (apart from the bigger top domaines like DRC, Leroy, and Leflaive as they travel more often around the world to promote the wines and have established good relationship with their representative) and even so, the allocation is very small thus most of the older generation wine collectors resorted to buying their wines through the London merchants,” he commented. “Then in 90s we saw some mid size producers like Rousseau, Comte de Vogue, Ponsot, Lambray, and Ramonet, releasing their allocation to Asia and in 00s smaller domaines started paying attention to Asia and this trend set to continue. These younger generation wine producers understand the Asia market is growing and have started paying more attention. With the recent economy crisis, most producers I spoke to last month, are facing some difficulties with their representative in USA, Ireland, Finland, Spain and even Japan, and many believe the China market is the new market and is going to be huge. At the Les Grand Jours de Bourgogne, I saw a significant increase of Mainland Chinese and Koreans visitors than the previous year. I believe Singapore, Hong Kong, Korea and China are starting to enjoy the attention and better allocations from not only the top producers but also some small family size producers as well,” Chee Wee concluded.
While those top domaines mentioned by Lee Chee Wee (DRC, Leroy, Leflaive, etc.) pretty much sell themselves, based on the groundwork they’ve laid early-on and international reputation, he and handful of similar distributors around Asia have their work cut out for them educating consumers and hand-selling many high quality, lesser known Burgundy names in Asia. “We know sometimes rich people are just buying labels,” commented Herve. “So we know that we need to increase the knowledge of the many, many good value wines from Burgundy.” He went on to make comparisons with Asia’s First Lady: “Due to the volume, Bordeaux is immediately more accessible than Burgundy – six times the size! It also has the benefit of immediate recognition, that the wines are mainly red and they can offer an expensive first growth range. Burgundy is a lot more complicated and has a lot more producers. I am quite optimistic – now things are moving quickly for us and the consumers are better educated. Bordeaux is easy if all you have to do is focus on the first growths. To penetrate the Burgundy walls it is necessary to make some effort,” he smiles, sitting back and crossing his arms in defiance. “But you are rewarded if you do make that effort.”