Vinfolio.com

Decanter broke the story on Friday that Macau, the world's largest gambling center, has eliminated its 15% import duty on wine (see "Macau scraps wine tax") effective August 26, 2008.  Such a move seemed inevitable after Hong Kong's identical decision earlier in the year for several reasons:

• Very little Macau tax revenue is lost as its 15% rate was already relatively low and the market is smaller than Hong Kong's.
• Strategically, Macau's gaming and hospitality business is far more important to its economic future than wine tax revenue and this move further supports that growth.
• Macau's alcohol-related businesses had been negatively impacted (down 30%) by Hong Kong's move (see story). 

Implications for Hong Kong

I don't think Hong Kong officials will see Macau's decision as a bid to compete with their own initiatives to be the leading fine wine hub in the region.  On the contrary, it makes Hong Kong even more attractive.  Here's why:

• The Macau gaming and hospitality industry is close enough to Hong Kong that it can be adequately serviced from Hong Kong (now without any obstacles in the way).
• The larger "tax-free" market opportunity increases attention on the region's potential as a fine wine hub which ultimately benefits Hong Kong over Macau as it's more established as an international business center.

Will China follow?

How long will it be before mainland China's wine import duties are reformed?  Don't hold your breath but the stark difference (0% vs. about 50%) can only help create pressure to bring duties lower (even if only for higher-priced fine wine while perhaps leaving existing duties in place on other wine to protect the development of the domestic Chinese wine industry).

I'm pleased to announce that we have reached two important milestones in our Hong Kong roll-out: the launch of our Hong Kong site, www.vinfolio.hk, plus pricing and pre-opening offers for full-service wine storage at our new climate-controlled facility being built out now.  We'll even help you move your wine from the UK at low cost.  Read details in our press release and on the site.

Note that our storage facility is open to both individual and trade customers, and there is no requirement that wine be purchased from Vinfolio to use our storage services.

I'm off to the airport to catch my flight to Hong Kong but I would be pleased to speak with any interested parties at the Hong Kong International Wine Fair.

The first annual Hong Kong International Wine Fair is next week from August 14-16 and Vinfolio Hong Kong will be exhibiting.  I will be attending along with our Vice President of Marketing, Rachel Blatt.  Please stop by booth 5D11 to introduce yourself.  The first two days of the show are limited to trade only, but Saturday, August 16, is also open to the public for HK$200 per visitor.

Please stay tuned for some further news on our Hong Kong expansion on Monday. 

How soon would you know if the cooling or humidity in your wine cellar were outside of a desired range?  Are you checking it frequently?  What if you travel often or have multiple homes with wine cellars? 

Over the past 10 years, the cooling unit in my home cellar has failed three times.  It's not clear how many days passed each time before I noticed (fortunately, San Francisco is rarely even in the 70s).  The point is, the risk of having wine damaged by unforeseen events is real and the time and effort to replace what might be years of effort collecting special bottles is hard to even fathom.

The CellarSensor solution 

CellarSensor is a product and monitoring service from CellarCentral.com which enables you to monitor your wine cellar conditions (air temperature, bottle temperature, and humidity) remotely using sensors that communicate via the Internet every 15 minutes (24/7) to CellarCentral's data center.  One or more designated people can be notified by phone or email-based alerts (get a sample phone alert) in the event of various conditions occurring based on parameters you set such as:

• High temperature
• Low temperature
• High relative humidity %
• Low relative humidity %
• No data (such as might occur if a power failure) 

Charts and reports are also available (see sample).

The San Diego-based company was founded by Chris Womack, a former HP engineer, and launched its initial sensor products and monitoring service in March 2007. Chris went through multiple generations of designs and tests to arrive at his current product set which is manufactured to his specifications in Japan.

VinCellar integration

We liked CellarSensor so much we decided to integrate it into our new VinCellar cellar management application (see today's press release). When using VinCellar, users are able to link their CellarCentral.com account to their VinCellar account and see a widget of key condition metrics (for 1 or more cellars) on the home page of their VinCellar account. 

In addition, we decided to become a dealer for the hardware sensors to provide one-stop shopping for VinCellar users.  For clients of our Personal Cellar Manager service, we will install the sensors on-site and become one of the people assigned to monitor alerts.

How CellarSensor works

The diagram below says it all:

How much is it?

The major cost components are:

1. Base station
2. Air Temp/Humidity sensor
3. Liquid bottle temp sensor
4. Monitoring and alerting service 

A CellarSensor Starter Kit Standard (items 1 and 2 plus one year of monitoring) is $498.  A CellarSensor Starter Kit Plus (which adds #3) is $648.  Additional sensors are $199 each and up to a total of 16 can be supported with one base station (see product specification sheet for more details).  After the first year, the monitoring and alerting service can be extended in 1,2, or 3-year increments for $199, $379, or $559 respectively (roughly $15.50-$16.50 a month).

As signing up for CellarSensor is a form of loss prevention, we've checked with AIG and they are willing to offer a discount on their wine collection insurance to their policyholders for deploying CellarSensor.  Depending on how much wine you have insured, this could effectively underwrite the cost of most or all of the CellarSensor solution.  If you're an AIG policyholder (or want to investigate switching), contact Jennifer Wolf of AIG at 415-836-2790 or jennifer.wolf@aig.com.

Want to get it?

Just call us at 415-946-1300 during business hours or email service@vinfolio.com. 

What is your reaction when you walk into a wine store that is noticeably warm, even hot?  Mine is to turn around and walk out.  Here's my rationale:

1. If the merchant cannot be bothered to take care of wine in its possession, it probably also didn't pay attention to how the wine was handled in the distribution channels prior to delivery.
2. Merchants will argue that in-store bottles turn over rapidly so the higher store temperatures will not have much impact on the quality of the wine.  But how does the buyer know how long the wine has been sitting (or standing!) there?  Fine wines also don't tend to fly off the shelves.
3. The negative impact of high store temperatures is a function of how warm the store is (see story below).
4. Even when a store in a warm weather climate is cooled, what happens to store temperatures after closing when the A/C is turned off?

My recent experience in Italy

I just returned yesterday from a vacation in Florence (which in July is hot -- highs of 35+ degrees C or 95+ degrees F).  Yet, not a single wine store I entered was air-conditioned despite carrying some very expensive wines.  Needless to say, I didn't buy anything.

The one notable exception that I found was in Lucca, Italy (an hour away) where a wonderful shop called Enoteca Vanni had an extensive selection of older Italian vintages mostly housed underground in a network of low-ceilinged, passive cellars.

Bottom line: The condition in which wine is stored is merely one of many criteria which should be considered in where you buy wine (see Criteria for selecting a good wine retailer).

P.S.    See also Wine storage temperature's impact on aging.

P.P.S.    This story was inspired by a recent article on Decanter.com titled "Top stores keep wine too warm" which reviews the situation in the UK.