Fine wine gives Hong Kong’s politicians a hangover

Hong Kong is a city in the grip of an obsession. The city’s wealthy elite are fixated by fine wines. The wine-drinking habits of Hong Kong’s leaders are now intruding on the city’s delicate politics.

The craze for posh wines amongst the rich of Hong Kong – and now, more broadly amongst the plutocrats of a rising China – has driven the prices of top Bordeauxs to crazy new heights. The most lucrative wine auctions in the world are now held in Hong Kong, not in London or New York. Smart restaurants in the city now often include a glass-fronted wine cellar to tempt and impress diners. Just opposite my hotel in the city’s Central district, I came across a shop called “Bacchus and Century“, which offers wine from every vintage stretching back to the beginning of the twentieth century. I went in, but didn’t even dare ask how much the Yquem 1900 costs. Just across the road, a wine shop was advertising tasting classes, under the slogan – “Got your MBA and still know nothing about wine?”

A taste for fine wine may have put paid to the political hopes of Henry Tang who, until recently, was the frontrunner to be Hong Kong’s chief executive. Just 1200 people get to vote in the election, later this month. But public opinion seems to matter and Mr Tang has been plummeting in the polls, ever since it was discovered that he had illegally built a large basement extension to his property. The basement is believed to include his wine-cellar and a tasting room.

The current chief executive, Donald Tsang, has also been accused of scandalous wine-related behaviour. He was accused of accepting free storage for his valuable collection from an American businesman. In fact, Mr Tsang had merely sold his wines to the businessmen and then donated the HK$20m (166,000 pounds, roughly) to charity. Yet even this admirably generous act left a bad-taste in the mouths of some, who were surprised to find that their chief executive had amassed a cellar of this value.

The wine-mania has also spread to governing circles in China. The irrational levels to which the price of Chateau Lafite, in particular, has been driven, is attributed by wine merchants to the fact that it has become the most prestigous possible gift to give to a Chinese government official.

In recent months, however, the price of Lafite has begun to fall. Is this a leading indicator of an economic downturn in China? Or is something more specific going on? A wine-dealer I met in Shanghai on Monday came up with two reasons for the decline. First, rich Chinese have begun to discover Burgundy, as well as Bordeaux. It is not just that these are great wines. The top Burgundies, like Domaine de la Romanee Contee (DRC) are made in such minute quantities that they are even more expensive than Lafite – and therefore even more prestigous.

Worse, fraudsters have got into the market and there is now thought to be a lot of fake Lafite doing the rounds. This is hardly surprising. The old labels are not hard to forge (certainly a lot easier than bank-notes) and the taste is largely indistinguishable from other, much cheaper wines, made in neighbouring properties.

The whole thing is crazy and reminds me of what I have read about “Tulip Mania” in the Netherlands in the fifteenth century.