A Passion for Burgundy: A Look Into Sotheby’s Wine Auctions
Albert Lin looks comfortable sitting on his chair at Sotheby's. His eyes stay focused on the big screen and the wine experts conducting the show. At the same time, he pays attention to his competitors and their next bids. His computer and notepads are on a round table in front of him, and he holds a card bearing the number 807. He can’t imagine being anywhere but in this place: Lin is a wine collector — and at the moment, he loves the Domaines of Burgundy.
Lin, 32, lives in Manhattan and is one of 40 people who participated in Sotheby's fine and rare wine auction held on December 7, 2013. The remarkable collection of wine bottles — the largest group of rare Burgundies to have ever been offered at an auction in New York City — drew in a total of almost $2,420,000 at the pre-sale estimate. By the end of the bidding, 94 percent of the collection was sold. An Asian private collector paid nearly $80,000 for six bottles of Romanée Conti 2009 Domaine de la Romanée-Conti. The second highest price was paid by a U.S. private collector: nearly $37,000 for 12 bottles of La Tâche 2009 Domaine de la Romanée-Conti.[related]
Wine auctions are a big business: in the first quarter of 2013, sales in the United States increased by 2.14 percent, according to the Wine Spectator Auction Index. The market for fine wines appears to be growing due to a deep passion for wine among collectors, and auctions represent the best place for these committed collectors to find the rare bottles they seek.
"We need to understand the mind of wine collectors," said Per Holmberg, vice president and head of Christie's wine department. "It is about searching and finding something. It is an exciting act."
For Lin, Saturday’s auction proved to be just that. Within half an hour, Lin had already bought six bottles of Pommard, Clos des Espeneaux 2001 Comte Armand Côte de Beaune, 1er Cru, and a mixed case of Olivier Bernstein.
"Wine is one of the best things in life," he said savouring a glass of Saint-Aubin, Sentier du Clou 1er Cru (Francoise et Denis Clair) of 2011 but keeping his attention on the bidding going on around him.
"Eight hundred dollars is the starting price for the lot number 193," said the man conducting the auction.
"I can offer $850," someone shouted across the room.
"No one for more? Sold for $950."
Lin started loving wine right after college. He usually goes to the auctions two or three times a year. "I fell in love with it; it just happened," he said.
For him, as for many others wine lovers, drinking wine is a ritual, a style of life. But Lin and his collector colleagues are also driven by a desire to assemble a collection of rare wines that they can savor, which is why the auction market remains strong.
"The economy has improved dramatically since 2008, which encourages the purchase of luxury items like fine wine," Peter Meltzer, Wine Spectator's auction correspondent, explained.
After Lehman Brothers collapsed in 2008, the market dropped by 30 percent, Holmberg noted. Demand among Asian collectors, however, brought wine prices back very quickly. "The major auction houses — Christie’s, Acker Merrall, and Sotheby’s — all held wine auctions in Shanghai or Hong Kong," said Karl Storchmann of the American Association of Wine Economists and managing editor at the Journal of Wine Economics. "The Chinese market has driven the prices," he said, adding that between 2008 and 2012, wine has outperformed the stock market.
And the industry keeps growing.
Christie's International Wine Department led the market in 2012. According to its data, the company’s global wine sales reached $90 million.
But prices are reaching new highs. During an auction in Hong Kong between November 22nd and November 24th 2013, a case (12 bottles) of 1978 Romanée-Conti Grand Cru, Côte de Nuits, was sold for almost $477,000 — about $37,000 per bottle. Critics consider Romanée-Conti one of the greatest wines in the world. During the same auction, another case of the same wine sold for almost $302,000, and a case from 1985 for $286,000.
Some buyers, Meltzer noted, buy to drink, while others look at fine wine as an alternative investment as wine has appreciated faster than the Dow Jones. "Almost every auction contains lots priced below $750 which would cost much more at retail," Meltzer said. "On the other hand, a single bottle of Domaine de la Romanée-Conti Romanée-Conti 2009 has sold for a much as $11,330. Some collectors wait five or so years after purchase in order to (hopefully) re-sell at a profit."
For Carlo Paoli, director of the Tenuta San Guido of Bolghery, Tuscany, buying a rare wine can translate into a highly profitable investment. Tenuta San Guido produces the well-known Super Tuscan Sassicaia, which has pioneered the Bordeaux style in Italy.
The most coveted wines hail from Bordeaux and Burgundy — critics extoll their virtues, noting that each of them has its own style and personality. But it may also be their scarcity that makes them so appealing — these wines are made in small quantities and are extremely hard to come by.
"Some also say there is a natural progression in collector's tastes from California to Bordeaux to Burgundy," Meltzer explains.
As for collector Lin, he has a wine cellar with 100 different wines. The oldest one is a German Riesling from 1970 that he bought a few years ago during an online auction at Acker Merrall & Condit. But if you ask him which is his favorite, he won't have any doubts.
"I like everything,” says Lin, swirling the wine inside his glass. “But if I have to choose, I will choose the Burgundy wines."