Charity wine auctions and auction houses specializing in collectible wines are facing a heavy burden—a collapsing economy and regional shutdowns due to the spread of COVID-19. While professional auction houses are relying on virtual platforms and online auctions to keep the bidding going, charity wine events are facing an immediate crisis.
The immediate choice for many is postponement or cancellation. Destin Charity Wine Auction’s organizers have postponed their 15th annual celebration to August, while the team behind Dallas' Côtes du Coeur has moved the event to June. Multiple others have canceled, including High Museum Atlanta Wine Auction, which last year was among Wine Spectator's top charity wine auctions. Auction Napa Valley, which has been one of the top two events in the nation for years and raised $11.8 million in live-auction bids in 2019, has also canceled.
Unfortunately, the inability to hold the auctions comes as communities are looking for help. Destin Charity Wine Auction supports 16 children's charities whose needs are growing by the day due to the coronavirus pandemic. "Their fundraising efforts have certainly been negatively impacted by the economic issues we are all facing as a result of the pandemic," John Russell, president of the Destin Charity Wine Auction Foundation told Wine Spectator. "Only time will tell how the economic impact of the pandemic will impact bidding." So far, Russell has near 100 percent confirmation from participants, vendors and supporters on the new date in August, and if social distancing measures are still in place then, he will move it to November.
Some auctions weren't so lucky. Shuttlecork Wine Auction in Kansas City was canceled, and organizers are figuring out what to do with the wine lots. "Some might transfer to next year, especially all the very unique travel opportunities to wineries," Julián Zugazagoitia, director of the Nelson-Atkins Museum of Art, the auction's beneficiary, told Wine Spectator. High Museum Atlanta Wine Auction is canceled, but will be auctioning donated lots online from April 13 to April 18.
Although Auction Napa Valley will not be raising paddles this year, the festival’s organizers announced this week that they would pledge to make donations at least equal to last year's total to help those in the community impacted by COVID-19. The money will come from the Napa Valley Vintners (NVV) reserve fund. According to NVV senior director of marketing Teresa Wall, live lots will be moved to next year.
Gavels move online
Professional wine auctions are faring better. Although nearly all live auctions have been postponed, business has remained steady through online sales. "We are positioned well to be nimble and adjust our sale calendars as needed," Chris Munro, head of wine for Christie's Americas, told Wine Spectator. "We are also equipped with the right digital tools to move things online and create more virtual interaction."
Zachy's auction on March 5 and 6 at Le Bernardin in New York, held before quarantine rules began, saw 98 percent of lots sold for a total of $9.9 million. President Jeff Zacharia told Wine Spectator that there were strong bids from Asia, with one Chinese bidder spending over $1 million.
Acker moved its March 28 Hong Kong sale and its two-day April 3 and 4 New York sale to "live online." Acker chairman John Kapon says he finds peace in knowing that the majority of winning bids at auctions these days come from outside the room. "I remain optimistic about the fine-wine market," he told Wine Spectator. "I think people still want their wine and there may be adjustments in the given demand for a particular segment, but compared to the rest of the world, the wine market is looking relatively great at the moment."
Sotheby's March 18 auction in London fetched some high numbers. Two cases of the legendary 1947 Cheval-Blanc sold for a combined $565,000 and a bottle of Japanese whisky fetched a record $435,000. Still, the auction house is looking for ways to diversify in times of crisis.
"We postponed our important Hong Kong auctions from April to July, so we have to wait to offer these great collections and are unable to generate revenues from them," Sotheby's Wine chairman Jamie Ritchie told Wine Spectator. "As a result, we are exploring ways in which we can sell property through our retail businesses and grow transactions through private sales."
Auction houses haven't experienced drastic changes in consignments, but they are seeing a surge from struggling restaurants. Zacharia has been approached by quite a few wine directors seeking help. "We're actively working with restaurants who need cashflow immediately," he said. Ritchie also mentioned that conversations with restaurants have started and Sotheby's will be helping the hospitality business stay on its feet.
As collectors dive into their cellars during this prolonged quarantine, auction houses are expecting a thirsty market once things go back to normal. "As more people are homebound, we do expect to see an increase in consumption," Munro said. "It's hard to speculate how this will affect future buying, but I do think there will be a renewed curiosity and interest in wine that could lead to collecting."
That market could be quite different by the time the pandemic ends, as shutdowns around the globe drive the economy into a potential recession. But auctioneers are projecting confidence for now. "The wines we sell are rare enough and desirable enough, and we are global enough, for the clientele to be resistant to volatility," said Zacharia.
Ritchie believes the market will be supported by people who need to refill their cellars and those who have realized, through this crisis, that wine brings enjoyment to our lives.
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