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News
Attention turns from HK to Singapore
The attention of fine wine merchants in Asia is increasingly turning from Hong Kong to Singapore.
According to the Financial Times, a combination of the continued Chinese austerity drive, too many merchants in Hong Kong and a growing number of millionaire collectors in Singapore and nearby Indonesia is making the city state an increasingly attractive place to do business.
With Hong Kong now home to 2,000 wine merchants catering to seven million people, while Singapore has just 100 merchants for a population of 5.3m.
Furthermore, WealthInsight has reported that the number of US dollar millionaires in Singapore doubled to 183,000 in the five years to 12 and is expected to rise to 291,000 by 2017.
One fear is, that with so many merchants now in Hong Kong and the continued austerity measures, the city is heading for a period of contraction.
Speaking to the paper, chairman of UK merchant Berry Bros & Rudd, Simon Berry, said that Singapore had previously been thought of as overshadowed by China, Hong Kong and Japan but now people are realising, “it’s a hub for southeast Asia,” as well as being an interesting market in its own right.
As was reported late last year by the drinks business, Singapore-based logistics company, CWT, is building a 750,000 square foot wine storage facility in Singapore – mostly to cater to private clients, including those from Indonesia who may want their wine closer to home than London, Geneva or even Hong Kong.
I do hope that journalists do deeper research when they write about the wine & spirits business in Singapore. Rupert Miller’s data is wrong and Singapore is flooded with wine merchants – much, much more than the mere 100 he is suggesting. The wine & spirits market here is congested with importers and distributors trying to stay afloat, and with the recent 25% hike in alcohol duties many will not make it past 2014. Poor journalism has for a long time now made the simple but fundamental mistake of equating Singapore’s imports to consumption. Without deducting re-exports numbers, consumption figures will be grossly exaggerated and meaningless as Singapore is a major re-export hub for all the countries in the region which incidentally are much larger than the little island city-state. It is this erroneous data that is so carelessly lapped up by journalists who then paint such a rosy picture of Singapore’s very impressive alcohol consumption levels. This in turn persuades many wine & spirits companies to rush to Singapore’s shores only to find cut-throat competition, high operating costs and dreadfully low margins a real wake up call. Please do your due diligence before you jump on this “gravy train”.