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Wine Spectator Auction Index Posts Small Gain in Second-Quarter 2013

Despite fewer consignments, percent sold rate remains stable

Peter D. Meltzer
Posted: July 23, 2013

The Wine Spectator Auction Index, which tracks sales of commercial wine auctions in the United States, inched ahead by .42 percent in the second quarter of 2013, rising from 313.13 to 314.43 points. Despite the meager advance, the quarter witnessed several record-breaking prices and a spate of new bidders from the U.S., Hong Kong, Singapore and Brazil, according to the country's auction directors.

“There certainly was an uptick in the market in the second quarter,” says Paul Hart, CEO of Chicago's Hart Davis Hart adding, “We saw a flat market go north.”

Jamie Ritchie, CEO & president, Americas and Asia, for Sotheby's Wine agreed: "Our auction business was relatively quiet through the spring and suddenly has come alive, which means we have a lot going on.” At a Sotheby’s auction in New York on April 27, a double magnum of Château Cheval-Blanc from the famed 1947 vintage brought a record $116,275 and a magnum of Château La Mission Haut-Brion 1945 sold for $15,925 (137 percent above the auction index average). At Spectrum on May 11, an Imperial of Château Pétrus 1990 fetched a record $51,425.

Domestically, the second quarter of 2013 saw 15 percent fewer lots go on the block – 15,211 – compared to 17,188 offered in the same quarter of 2012. Total sales this quarter were $35,589,711 compared to $45,321,857 in the second quarter of 2012. However, the percent sold rate (an indicator of the health of the market) remained a robust 94 percent.

In Hong Kong, results were softer than usual in the second quarter of 2013. The aggregate for the four auctions conducted was US$22.6 million compared to nearly US$35 million achieved in eight sales during the same period last year. As in the U.S., most auction specialists attributed the decline to a dearth of consignments.

Back in America, Zachys led the domestic pack with $11.2 million in sales, closely followed by Hart Davis Hart at $11.1 million and Acker Merrall & Condit at almost $10.1 million. In Hong Kong, Sotheby's was the overall leader with $8.8 million in revenues.

As a category, classified Bordeaux rose .77 percent. The 2000 vintage was up 2 percent, led by Château Lafite Rothschild 2000 which gained 8 percent in value, averaging $1,682 per bottle. Château Cos-d'Estournel 1995 was the star of that vintage, up 27 percent at $195 per bottle, while Château Palmer 1990 rose by 35 percent to average $306 per bottle. The overall gainer of the 1989 vintage was Château La Mission-Haut-Brion, up 79 percent at $974 per bottle.

Red Burgundies, which are tracked separately from the auction index, rose 1.26 percent. Highlights included Jacques-Frédéric Mugnier Musigny 1985, which rose 129 percent to $1,540 per bottle, and Domaine de la Romanée-Conti Romanée-Conti 1985, which rose 58.4 percent to average $11,704 per bottle.

Rhône reds rose by two percent. Top achievers were Château Rayas Châteauneuf-du-Pape Réservé 1983, which rose by a hefty 81 percent to average $582 per bottle. Jean-Louis Chave Hermitage White 1999 gained 66 percent to average $169 per bottle.

Blue chip California listings rose 7.2 percent. Dominus Estate 1985 was the biggest gainer, up 34 percent, averaging $82 per bottle. As a category, California cult wines rose 6.1 percent. Harlan Estate 1994 gained 14 percent to average $925 per bottle. Even more dramatic was Colgin Cabernet Sauvignon Napa Valley Herb Lamb Vineyard 2001, which soared 71 percent to average $274 per bottle.

Premium bottlings from Piedmont and Tuscany fell 7 and 12 percent respectively. Luciano Sandrone Barolo Cannubi Boschis 1996 dropped 24 percent to average $197 per bottle and Altesino Brunello di Montalcino Montosoli 1997 declined by 34 percent to average $81 per bottle. By contrast, Vintage Port appreciated by 9.8 percent, with Graham Vintage Port 1963 rising 46 percent to average $306 per bottle.

Some of the quarter’s biggest gainers included Château Suduiraut 1989, which rose a whopping 298 percent to average $199 per bottle. Equally impressive was Giacomo Borgogno & Figli Barolo Riserva 1964, which advanced 226 percent to average $267 per bottle.

Laggards included Moët & Chandon Brut Champagne Cuvée Dom Pérignon Oenothèque 1966, which declined by 55 percent to average $1,476 per bottle, and a double magnum of Bruno Giacosa Barbaresco Asilli 1997, which also fell 55 percent to average $549 per bottle.

The second quarter witnessed a considerable amount of excitement off the auction block. In New York, Michael Jessen, longtime managing director of Zachys, along with auction director Julia Gilbert, resigned to take up similar positions with Wally’s, the established Los Angeles wine merchant that was recently taken over by Paul, Maurice and Armand Marciano, passionate wine collectors and founders of global fashion firm Guess. Not surprisingly Wally's has announced the creation of a Los Angeles wine auction division and is planning a New York-based spinoff.

Zachys wasted no time in appointing Jamie Pollack as the firm's Managing Director for North America. Pollack brings with her over a decade of wine industry experience. She has been with the company for the past six years and holds certifications from the American Sommelier Association and the Court of Master Sommeliers.

Overseas, wine investment funds experienced serious difficulties. The Vintage Wine fund, a Cayman-based fine wine investment vehicle founded by Andrew Davison (which once boasted £110m in assets), will be wound down after succumbing to meager performance, forced sales and a spate of redemptions. "The wine market is dead,” said Davison in an interview with The Financial Times. “It could take years for this market to recover." The demise of the Vintage Wine fund also comes as Luxembourg’s financial regulator is forcing Nobles Crus, once the world's largest registered wine fund, to prevent its investors from selling additional shares.

In response to Davison's austere outlook, John Kapon, CEO of Acker Merrall and Condit, said the outlook for sought-after vintages in the fine and rare wine market is far from bleak. "It is easy to understand why a fund that did not succeed would blame the market as opposed to its own management. Most funds have followed the traditional method of buying Bordeaux as futures and not doing much more.”

“The overall wine market is quite healthy and active, with the opportunity for significant gains,” adds Kapon. “My recommendations are to look to Bordeaux 2005 and older, along with the rest of the market such as choice Burgundy, Champagne, Italy and other regions selectively.”

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