Feb. 27 (Bloomberg) -- Acker Merrall & Condit and Bonhams will hold their first Asian wine auctions in Hong Kong to tap growing affluence in the city and China, the final destination of an estimated 40 percent of vintage wine sold in London.

``More and more of our business is going to Asia,'' John Kapon, president of Acker Merrall & Condit, the oldest wine shop in the U.S., said in a phone interview today. ``I couldn't believe no one had done a wine auction in several years, and I thought the timing was right.''

As much as HK$5 billion ($642 million) of vintage wine could be sold yearly in Hong Kong, based on how much city residents buy internationally, said Boris de Vroomen, who leads a venture in the city between Diageo Plc and LVMH Moet Hennessy Louis Vuitton SA. The city is Christie's third-biggest auction market after New York and London.

Christie's, which last auctioned wine in Hong Kong in October 2001, may also resume sales, de Vroomen said. ``They're very interested in re-starting auctions here,'' de Vroomen said in a phone interview yesterday.

Acker Merrall & Condit will hold its auction on May 31 at the Island Shangri-La in Hong Kong, Kapon said. Bonhams, London's third-biggest auction house, will hold its sale in April and has yet to set an exact date and venue, the company said in an e-mailed statement.

Wine Tax Scrapped

Hong Kong abolished taxes on wine and beer after posting a record surplus today, boosting efforts to develop wine trading. The ``thirst for top-level wines'' in the city ``is growing at an exponential rate,'' Frank Martell, Bonhams' international director of fine and rare wines, said in the statement.

China's economy grew 11.4 percent in 2007, the fastest pace in 13 years, and is poised to become the world's biggest contributor of economic growth in 2008. The country's trade surplus jumped 23 percent to $19.5 billion in January, a sign the economy may keep powering global growth as a recession looms in the United States.

Hong Kong, a trading and financial hub for China, posted the fastest economic expansion in seven quarters in the three months ended December, 6.3 percent. Still, growth will ease this year to between 4 percent and 5 percent, John Tsang, the city's financial secretary, said today in his budget speech.

Asia's Wine Spending

Sales by Hong Kong's ``wine-trading and distribution businesses'' may rise as much as HK$4 billion because of the decision to scrap the wine duties, Tsang said . About HK$55 billion is spent on table wine in Asia excluding Japan, he said, citing industry estimates.

Kate Swan Malin, a Christie's spokeswoman in Hong Kong, declined to confirm or deny the company is considering resuming local wine auctions. ``We will continue to monitor developments here and are open to opportunities,'' she said by e-mail.

Christie's sold a record $72 million worth of wine in international auctions last year, 22 percent more than in 2006, a company statement said.

One-fifth to as much as a quarter of the $200 million to $400 million worth of wine sold at international auctions are bought by Hong Kong residents, said de Vroomen, managing director of Moet Hennessy Diageo Hong Kong Ltd. He is also co- chairman of the Hong Kong Wine & Spirits Industry Coalition.

In London, about 40 percent of the 600 million pounds ($1.2 billion) sold by fine-wine merchants annually are bought by Hong Kong, Macau and China residents, according to a presentation document from the industry group. ``Most of that is actually to Hong Kong, although China is growing,'' de Vroomen said.

Acker Merrall & Condit plans to hold another auction in November and ``at least two auctions a year in Hong Kong'' after that if the May auction is successful, Kapon said. An average of 15 percent of its wine sales at auctions are made to Asian residents, he added.

The company has auctioned about $60 million of wine annually in the past two years, according to Kapon, who said he sought to tap the Asian market after visiting the region for the first time in August.

To contact the reporters on this story: Frank Longid at flongid@bloomberg.net; Wendy Leung in Hong Kong at wleung12@bloomberg.net

Last Updated: February 27, 2008 05:01 EST