China's cup is overflowing for fine wine

Lot after lot of French Bordeaux and burgundy comes up for auction. Each time, a bidding war breaks out. A case of 1982 Chateau Lafite-Rothschild sells for more than $71,000 U.S., about $6,000 a bottle, well above the estimated price.

"This is exceeding our expectations," says Jeff Zacharia, president of Zachys, the New York wine auction house that held the event this month. "We have a lot of people from mainland China here today, and they feel the Lafite is the wine to have."

The scene has become increasingly familiar in Hong Kong as record wine prices, surging imports and sales make this city the high-end wine capital of Asia.

In 2010, Hong Kong overtook New York as the world's biggest locale for wine auctions. (At a Sotheby's Hong Kong auction in October, three 1869 bottles of Chateau Lafite-Rothschild sold for a record-breaking $232,692 apiece.) Wine imports to Hong Kong — a gateway for the region — are also setting records. And sales of mid- and low-end wines have been rising since the Hong Kong government eliminated wine taxes in 2008.

In the past two years, wine sales have climbed 13% in Hong Kong even as U.S. and global sales slipped, according to Euromonitor, a research firm. Sales in China and Asia Pacific are rising even faster.

Asia's explosive wine demand is attracting the attention of producers from the USA to Latin America to Europe, all vying to establish a foothold in this promising market. Over the next 15 years, China, including Hong Kong, could become the top wine-consuming country in the world, according to Vinexpo and International Wine and Spirit Research.

For American winemakers, however, the battle to win over the palate of Asian consumers is likely to be an uphill one. "In America, the culture is freedom and fast food," says Calvin Lee, 36, who traveled from Guangzhou, China, to attend the Zachys' wine auction. "They don't have a long history of food and wine" like the French.

Hong Kong is betting that its reputation as Asia's wine hub will help bring in more tourists.

Last year, the city's second annual Wine & Dine festival, which pairs food and wine from around the world, attracted 110,000 people, up 57% from the event held the year before.

"Wine is a growing phenomenon here," says Bill Flora, U.S. director for the Hong Kong Tourism Board. "The number of wine bars that are opening up in Hong Kong is pretty incredible."

One of those wine bars, California Vintage, is hoping to change consumers' perception of American wines. Partly financed by 22 California wineries, it will showcase 88 wines from across the Golden State. Susan Darwin, chief branding officer for California Vintage, says the best way to educate consumers about the quality of American wines is to give them an opportunity to try them.

"Historically, there hasn't been a strong presentation of California wines in Asia," Darwin says. "Unless the consumer has a reason to demand them, they're not going to do so."

California Vintage plans to open more than 20 wine bars throughout Asia, in places like mainland China, Singapore, Japan and India, within five years.

Other venues in Hong Kong also are starting to promote U.S. wines.

For its first batch of wines, the 3-year-old 8th Estate Winery — Hong Kong's first urban winery — bought grapes from Washington State to make Cabernet Sauvignons and Chardonnays, among other wines. Most of these 2007 wines sold out quickly, according to Lysanne Tusar, founder of the 8,000-square-foot winery.

The sales were mainly to expats. But over time, Tusar is hoping that Chinese consumers will be open to trying 8th Estate's wines as well. "Hong Kong will always be brand-conscious," she says, "but ... people are increasingly looking for the diamond in the rough."

For now, most Chinese in Hong Kong and China drink red rather than white wine. "The red color means good luck, happiness," explains Joy Huang, a research analyst at Euromonitor.