HK needs to step up its wine provenance checks

Hong Kong’s wine merchants should step up provenance checks on wine in order to maintain the city’s competitiveness as a gateway to mainland China, says Henry Ho, founder of the Hong Kong Wine Chamber of Commerce (HKWCC).

Henry Ho (left), founder and president of HKWCC, and Anty Fung from Wine World Xplorer

Ho made the comments as Hong Kong’s previous advantages, including being a main logistic centre in Asia and its tax-free policy on wine, are becoming less competitive, as mainland China itself has opened up more free trading ports and signed free trade agreements with countries such as Australia and Chile.

“Hong Kong doesn’t have much advantage in terms of logistics, port costs in Hong Kong are even more expensive than these on the mainland,” Ho stated when talking about Hong Kong’s role as a logistic and distribution centre.

China at the moment has seven of the world’s top 10 ports (including Hong Kong) based on cargo and container throughput.

“For the mainland market, Hong Kong is a professional wine city, not just a distributing centre,” he said. Different from the mainland, Ho believes Hong Kong should capitalise on its strengths in complementary services that come with being a wine trading hub, namely wine storage and provenance assurance as a quality watchdog.

Speaking from his experiences, he said Hong Kong is still preferred by mainland wine buyers mainly for its credibility and quality guarantee. In cities like Chow Chiu in Guangdong province bordering Hong Kong, wine fraudsters even tout fake Penfolds based on different degrees of resemblance to the real deal, he revealed.

Wines with VinoGuard tags

“We are living in a time when people care about provenance, and demand for fine wine coming from mainland China is very strong. With so many different ways of sourcing wines now, they choose Hong Kong merchants because it more or less provides security,” he continued.

However, this doesn’t rule out the fact that there are corrupt merchants within Hong Kong peddling fake wines or greedy merchants from the mainland who open shell companies in Hong Kong to sell back wines to mainland consumers, giving the pretence that the wines are sourced from across the border.

Citing Hong Kong’s integrated wine trading platform Wine World Xplorer (WWX) as an example, he praised the platform for giving wine complete transparency.

The platform offers a comprehensive set of services from trading, to wine storage and most recently asset management. Compared with other online platforms or e-commerce companies on the mainland or in Hong Kong, WWX offers international multi-location storage and wine asset management modules in three different locations and currencies, as well as allowing its users to check real-time prices and stock levels.

A sample of how VinoGuard works to trace and report a bottle’s information

This, according to Ho, gives wine traceability and transparency. “Hong Kong can play the role of quality check. In addition to wine sourcing, it provides storage, security and multi-currency options, this is something that platforms like JD.com can’t do. Their natures are completely different, and the Hong Kong one focuses more on fine wine and has more transparency,” he elaborated.

Echoing Ho’s view, Anty Fung from WWX added that the platform introduced an NFC-enabled VinoGuard solution to prevent counterfeiting and possible tampering. “These tags are NFC-enabled and once scanned, it would provide the user with information about the bottle condition upon departure from the warehouse location where the tags are being programmed,” she explained.

“The tags also store, in encryption, essential data such as the original source of the bottle; the number of times scanned and so on. All malicious attempts to counterfeit these tags will be read by the programme and real-time alerts will be sent to the administrator,” she continued.

The company at the moment offers the application of VinoGuard tags as a complimentary option to WWX users whenever the bottle value surpasses HK$1,000, according to Fung.

“We certainly hope to see more popular use of VinoGuard tags so to enhance access, or in the beginning, more awareness on wine provenance information,” she concluded.

Launched in October last year as an integrated multi-currency, multi-location wine trading and portfolio management platform linking France, London and Hong Kong, the platform now features HK$700 million worth of wines, according to the company.