Ever since I moved back to Brunei in April 2015, I have made several trips to Hong Kong. I like Hong Kong very much – it is a vibrant city, filled with culinary delights at every corner. More importantly, I get to see and meet up with old friends I have there, some of whom I have been in close contact since we left a Quaker boarding school a long time ago.
One such person is Herman Lam, General Manager of a wine merchant business which he founded back in 2013. We would catch up over very nice wines and delicious food. Hong Kong is a fantastic place to drink wines – especially premium ones. This is mainly due to zero duty and sales tax on wines passed by a former Chief Executive who always donned a fancy bowtie and was very fond of his clarets and cigars.
The range of wines one can get and find in the local wine scene keeps expanding and improving. I’ve never failed to be captivated. One gem which I came across lately at a natural-wine-drinking bar was a Drappier Blanc de Quatre Blancs – a rare bottling indeed!
Every time Herman and I met, whether it was to share a bottle of fine wine, or to check out the latest up and coming joint for Teochew cuisine, we would talk about the serious side of the wine business. The same questions kept cropping up, one of which is to determine the amount of premium or discount he should place on this particular wine if he wants to shift the wine within a particular timescale (my apologies for the wine-business speak here). What this really translates to is how should one price a wine?
I’ve always been curious about the business side of wine but never in the detail which I find myself interested in today. Previously, I only drank, and I drank a lot whilst I was a graduate student at the University of Oxford. Those of us fortunate enough to be involved in the wine societies in Oxford know how privileged we were. Some of us would learn to be ‘objective’ in wine tasting through blind tasting while others would speak the wine lingo having attended classes on wine education with a professional trade and wine-education-accreditation body. Wine producers flocked to us, to talk and share their passions of crafting the product which they presented in front of us students.
I enjoy drinking and reading Tom Stevenson. Over the course of my graduate studies, I have imbibed a copious amount of really delicious grape juices and worked my way through two editions of the Sotheby’s wine encyclopedias. I went to numerous tasting events and rarely used the spittoons which I only reserved for wine-tasting competitions. All these elements played a crucial role in shaping the informal wine education which I received during my time at Oxford. Like Tom, I can be a bit too opinionated about my tastes, much to the annoyance of many of my peers.
Only equipped with simple fundamentals from econometrics and some big-data-analysing skills which I acquired over the duration of tertiary education as a physicist/optical engineer/biophysicist, I decided to give it a go at understanding the mechanics behind the fine-wine market. The questions are defined and I want to answer them, not only as a favour for a close friend but also for my personal understanding.
So how should one price a wine? How does one gauge the market and measure its thirst, whether insatiable or not, for a given wine? Is there a way to find out how many bottles of a particular wine is available for sale in the market right now?
I don’t claim to provide the most comprehensive, or chapter-and-verse responses to these questions. What I hope to be able to achieve in the upcoming series of blogposts is to shed some light on these questions which are of particular interest to those of you involved in the wine trade. However, this series isn’t just restricted to those of you specifically in the trade. You know who you are! 😉
At the end of the day, we mustn’t forget to let the wine do the talking. As an old Latin saying goes: in vino veritas…