Rising number of wine fraud in Hong Kong


The recent wine boom which began in Hong Kong in 2008 led to a surge in wine-related illegal activities ranging from wine theft, fake wines to wine investment frauds. The most recent wine investment fraud in Hong Kong involved a wine broker called “Premium Liquid Asset”. The sudden disappearance of the top management was widely reported in local newspapers such asMing PaoandOriental Dailyin June 2011.


As of July 7 2011, the official website of thePremium Liquid Asset was still working. “Premium Liquid Asset” built itself as a leading fine wine wholesaler with offices in Bordeaux, Singapore, Hong Kong, China and Malaysia. Local Chinese newspapers reported a loss of HK$50 million dollars among more than 400 victims, averaging a loss of HK$120,000 per person. A renowned Hong Kong-based fengshui master,Mr. So Man Fung, was allegedly one of the victimsof this en primeur fraud. It was reported that he lost HK$4 million dollars from purchasing 30 cases of en primeur Bordeaux first-growth wines during September and October 2009 from “Premium Liquid Asset”.


This type of illegal wine investment fraud is not uncommon. Last October, the wine investment fraud in the United Kingdom was widely reported where GBP 2.5million (equivalent to HKD$300 million) of non-existent 2005 Bordeaux first-growth en primeur were sold to investors. TheIndependent Postreported consumers in the United Kingdom had suffered a loss of GBP38 billion a year over wine scams and frauds according to the National Fraud Authority.


Local newspaperWenweipo’scommentary raises the question of whether a regulatory framework for Hong Kong’s wine industry is necessary. Currently, in the United Kingdom, in order to sell wines, the seller must obtain a personal license in addition to obtaining another license for the premises under“Licensing Act 2003”. The personal license will only be granted to persons who are proven to be responsible, with good character and have no criminal record. In China, the activity of buying and selling wines is regulated by the“Administrative Rules for Imported Alcohol in Chinese Market “. Sellers must obtain the “commodities import license”, “customs duty-paid voucher” and “sanitation certificate”.


In Hong Kong, the free market economy has no such regulations. As much as we love the non-interventionist policies which have allowed this city to thrive, is some type of protectionist policy for wine investors something we should consider? 


Click here for a checklist of items to research into before commitment to any en primeur purchase.