I may have seen the writing on the wall on Monday night for prices for collectible, blue chip wines. But I don’t think you have to be clairvoyant to know what is coming.
I attended a charity auction in Montreal, and a number of big name wines, particularly from Domaine de la Romanée-Conti, were not making reserves and selling under past auction and retail prices. Some were even going unsold.
You might say that it was a charity auction, so it didn’t really count. But usually people are more willing to pay high prices for great wines during a charity auction because it is going to a good cause. I wonder what would have happened if the same 250 people were part of a commercial auction?
Granted, the sale on Monday night was following one of the worst days on Wall Street in years. So there was very little for those affluent few attending the event to celebrate. But the event, which still raised about $650,000 for a special education school in Montreal called the Summit School, was a success. All the money from the sale went directly to help physically challenged and special need students who attend the impressive Montreal school.
But I had to wonder if I was seeing the beginning of a decline in the market for high end, blue chip wines – even as isolated as a charity wine auction in Montreal might be. (See our latest Auction Highlights for prices from recent U.S. commercial wine auctions.) There is no way that the heady prices achieved even a few weeks ago for super-collectible bottles can be maintained.
In fact, I am getting offers from wine merchants around the world (mostly from England and Switzerland) on first growths and mega-buck Burgundies that are already about 10 percent down from a month ago. Wine merchants trading bottles among themselves are apparently slashing prices even more. I know one who consistently is making offers to buy stock at 30 percent list price, and he is more and more successful.
Friends in the wine trade around the world tell me that investors are already selling hundreds of cases of wines to brokers, or at least are hoping to. A lot of financial whiz kids who made six and seven figure bonuses over the last decade plowed a good percentage of that into investment-grade wines. And now they are hoping to liquidate their wine investments since their other investments have either vanished or tanked. Many no longer have jobs, as we all know. I feel sorry for them. But they may find out that the only thing liquid about their wine investments is that they can pull the cork on them and drink them if they wish.
The fact is that if hundreds, perhaps even thousands of cases of collectible, blue-chip wines come onto the market in the next few months, it is going to have a major effect on the market.
Prices have to come down. The only question now, in my opinion, is how far and for how long?
Claude Kaber — Luxemburg — October 9, 2008 3:39pm ET
James J Sherma — hershey, PA — October 9, 2008 4:25pm ET
Carl Gauthier — October 9, 2008 5:04pm ET
Scott Oneil — UT — October 9, 2008 5:07pm ET
Mark Reinman — NJ — October 9, 2008 5:34pm ET
James Suckling — — October 9, 2008 5:34pm ET
James Suckling — — October 9, 2008 5:48pm ET
Jeffrey Ghi — New York — October 9, 2008 9:49pm ET
Matt Scott — Honolulu HI — October 10, 2008 1:08am ET
Caleb Smith — Lake Placid NY — October 10, 2008 4:40pm ET
Brian Ross — Encino, California — October 11, 2008 12:34am ET
David Allen — Lufkin, Texas — October 11, 2008 8:50am ET
Martijn Schilperoort — HOLLAND — October 11, 2008 7:50pm ET
Jeffrey Ghi — New York — October 11, 2008 11:54pm ET
Massimo Marinucci — Pound Ridge, NY — October 12, 2008 8:42am ET
James Suckling — — October 12, 2008 9:59am ET
Massimo Marinucci — Pound Ridge, NY — October 12, 2008 1:10pm ET
Lorenzo Erlic — victoria canada — October 12, 2008 5:18pm ET
Jim Nuffield — Toronto — October 12, 2008 7:39pm ET
Bernard Mclaughlin — Chicag,Il — October 16, 2008 5:35pm ET
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