Red obsession ::the ascent of fine wine in China

This article uses hammer prices from five global auction houses to analyse the price premium Bordeaux fine wine yielded at Hong Kong wine auctions over the period 2007 to 2014 . We find that fine wine was on average sold at a 19% premium on the Hong Kong market . The strong latent demand by Chinese customers coupled to wine market characteristics are put forward as an explanation for this premium . We further observe that the Hong Kong premium is not uniform and most pronounced for wines with perfect Parker scores or for the most powerful brands . The premium has declin ed through out the sample period from 60% in 2008 to establish itself at a level of 15% since 2012. This can be attributed to the increase in knowledge on fine wine by Chinese customers