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HNWI wine demand prompts firm to open Asia office

HNWI wine demand prompts firm to open Asia office

Cult Wines, a specialist in the acquisition and investment management of fine wines, has opened its first office in Asia.

It has placed a team in Hong Kong to manage and grow its already significant client base in the region.

Of global sales in 2016 of $25 million, Asia has been Cult Wine’s biggest growth market, rising from 20% in 2014 to 30% by end August.

It represents $ 7 million in annual sales, with an expectation of that growing to 40% of total sales by the end of 2017, it said in a statement.

Since August 2014, the company’s Asia client base has grown by 134% with a 462% increase in transaction volumes to 31 August.

This has been fuelled by growth in both mainland China and Hong Kong-based high net worth individuals with the company dealing with more than 250 customers in the region.

Managing director Tom Gearing, said, 'With the devaluation of the RMB as well as the Chinese government putting stricter capital controls in place, limiting the options for private individuals to make overseas foreign investment, we have seen increased interest from China-based clients looking at alternatives such as wine investment, and we expect this to continue.

'Further to this with the strengthening of the US dollar versus sterling and euro, we have already seen the knock-on effect of increased buying power for dollar-linked currencies in Asia, in particular Hong Kong and Singapore, and expect this trend to continue to impact the wine market in 2017 as buyers look to take advantage of favourable pricing.'

Chinese wine imports were up 18.3% in 2016, representing $1.97bn worth of bottled wines, with global consumption of wine set to increase by 6.14% per annum over the next five years, according to a report by The Drinks Business this month.

Gearing noted, 'With the creation of new wealth and new interest in fine wine, the outlook remains positive, particularly as a number of key areas of the market remain undervalued from the previous peak in 2011. The growth in 2016 has been sustained and more fully supported than the previous boom period from 2009 to 2011.

'There has been a notable increase in interest and education here in Asia, hence a nearly 20% growth in wine imports last year.

'Importantly, the stock flows and buying trends have never been more diverse mitigating any concerns of potential market gyrations.'

Cult Wines is a family business originally based in Richmond, London.

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