Auctions: Paddles Up

The auction market offers old, rare and ready-to-drink bottles, with ample bargains in the mix

Auctions: Paddles Up
(Nathan Hackett)
From the Feb 29, 2020, issue

Banging gavels, seas of paddles, spitfire auctioneers, soaring prices—such is the rarefied air many associate with wine auctions. But though stratospheric bids, ultrarare bottles and billionaire clientele may make the headlines, the world of wine auctions is in fact much broader—and more accessible—than many believe. And there is no better outlet for acquiring mature wines from reputable producers that are ready to drink.

What They Sell

“You see a story that we sold a bottle of  ’45 Romanée-Conti for half a million dollars last year and think, wine auctions, that’s not for me,” says Julia Gilbert, senior wine adviser at Sotheby’s. “But that’s a huge misconception. You can get great cases of wine for $200 or $300, and that’s something that a lot of people are surprised to find out.”

John Kapon, chairman of Acker Merrall & Condit, is even more emphatic: “The auction market provides the best selection of fine and rare wines, period. Nothing comes close. You’re going to find wines that are 20 years, 30 years, 40 years and older. You don’t see those in retail.”

This depth of offerings, coupled with the efforts houses undertake to verify the authenticity of the wines they sell, makes auctions one of the only viable avenues for acquiring trophy-level bottles likely to retain or increase their value. For ambitious collectors willing to shoulder the risks of investing in blue-chip wine, bidding at auction is the best bet.

How They Work

Though their specific offerings and schedules differ, the major wine-auction houses—Acker, Baghera Wines, Christie’s, Hart Davis Hart, Heritage, Sotheby’s, Spectrum and Zachys—all operate under essentially the same model. Collectors wishing to liquidate part or all of their inventory consign their wines to a house for sale to the public. The house then disseminates information about the sale via catalogs and the Internet, and by contacting potentially interested clients with whom they have existing relationships. Finally, a sale is held—live, online or both at once—in which buyers bid on the consigned lots.

This range of purchasing options means that auction newcomers need not step outside their comfort zones—or even their homes—to win lots. Perhaps the simplest method for participating in a sale is by placing an absentee bid, essentially a maximum bid on a specific lot transmitted to the house prior to the auction. If the reserve (the minimum bid allowed on a lot as stipulated in the house’s agreement with the consignor) is $1,000, your absentee bid is $1,500 and there are no competing bids, you get the lot for $1,000.

How to Bid

The convenience of online bidding notwithstanding, most professionals agree that the best way to become involved in wine auctions is to attend one in person. “For the newbie, in the room is the way to go,” says Charles Antin, senior wine specialist at Zachys. “You can take advantage of lots that may not have much interest, you can taste wines on offer in the auction, and of course you can have a free lunch at Le Bernardin, Per Se, Smith & Wollensky, or wherever we’re doing our auction.”

The value of in-person bidding is echoed by Julie Carpentier, deputy director of Geneva-based Baghera Wines: “I would recommend attending the salesroom to feel the atmosphere of the sale, and in order to observe and understand who are the major buyers that one will have to compete with, especially if you are seated at the back of the room; it offers a great observation post while remaining discreet.”

Though specialists are typically available to answer questions about the lots on offer during the sale, it is imperative to do your homework, identify wines of interest in the catalog beforehand, and stay alert lest you miss your window to bid. Auctions move quickly, and decisiveness and discipline are rewarded, especially in the face of the potential competition—industry professionals, third parties bidding on behalf of absentee clients and deep-pocketed collectors.

“The most important rule of thumb for anybody buying at auction: Learn to walk away,” says Frank Martell, senior director of fine and rare wine at Heritage. “And relatedly, you’re never going to see something for the last time. Knowing that you can find this wine again is what’s going to keep you in the auction game for a long time.”

Following a spate of high-profile counterfeiting cases, auction houses now go to great lengths to assess the quality and authenticity of the collections under consignment. Specialists taste samples and pore over the bottles, noting the wine’s ullage, label condition, color, capsule and glass. Establishing provenance—the chain of ownership of a wine—is also a priority. “I have stepped away from big, big deals because they couldn’t prove where they bought wines,” says Martell. “It’s about the integrity of the auction house.”

But where there is risk, there is reward, and no other method of wine-buying offers the rewards of bidding at auction, from the peerless selection to the convivial atmosphere of the salesroom to the thrill of raising a paddle and winning it live.

Auction Dos & Don’ts

Do: Consult the catalog beforehand to learn about the wines on offer. “Going to an auction and not knowing what you’re going to do is not a good strategy,” says John Kapon of Acker.

Do: Ask questions about the wines on offer, the consignor and the nuts and bolts of bidding. “We welcome inquiries,” says Julia Gilbert of Sotheby’s. “We want people to be engaged, and we want to be as transparent as we possibly can.”

Do: Remember the fees. In addition to the hammer price, bidders should consider the buyer’s premium (roughly 20% to 25%) and applicable sales tax, as well as costs for insurance and shipping.

Don’t: Chase bids or get too competitive. “Somebody who needs to win is not going to have a good time,” says Frank Martell of Heritage. “It’s really easy to overpay for wine, and as an auction house, to be honest, it doesn’t excite us, because that’s someone who won’t come back next time.”

Don’t: Buy on reputation without doing your research. “Interest and prices can be driven by reviews and a wine’s reputation,” says Charles Antin of Zachys. “And just because a wine isn’t expensive doesn’t mean it’s not an amazing bottle.”

Don’t: Get distracted and miss your lot. Between the bustle of the salesroom and the food and wine on offer, it’s easy to get distracted in the midst of bidding. Keep track of the auction’s progress and be ready to jump in when the time is right.

Auction Best Buys

Top Producers in Off Vintages: “There was a time when 1988 through 1993 Lignier Clos de la Roche were all $300, except for the 1992, which you could have had for $70,” recalls Frank Martell of Heritage. “And there was a time when that ’92 was the best-drinking out of that group of wines that wasn’t yet matured. So for $70 you’re drinking grandcru Lignier Burgundy. Buying a vintage that isn’t terribly well-represented in the media but is mature and ready to drink, that stuff is all really inexpensive for the quality you have on offer.”

Fine and Rare Categories Beyond Bordeaux and Burgundy: Though the heavy-hitters from France and, to a lesser degree, Napa command the lion’s share of the auction market on a dollar basis, great values abound from the rest of the wine world: Italy, Spain, Germany, the Rhône Valley and Champagne can deliver excellent price-to-quality ratios.

Mixed Lots: It’s common to see lots composed of full and half cases of the same wine, but many auctions also offer packages made up of multiple wines and producers, typically selected by the specialist team. “Usually, it will be wines we put together for a reason,” says Julia Gilbert of Sotheby’s. “So maybe three or four different grands crus Burgundies from the ’90s that’s a mixed lot will sell for a different price per bottle than if it were a pure 12-bottle case of any one wine.”

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