Global Wine Auctions Hit a Record $408 Million in 2010

Hong Kong overtakes U.S. as the largest market
Dec 29, 2010

If there was ever any question that the wine auction market wouldn't recover from two years of decline, 2010 provided the answer. According to figures released by the major commercial auction houses, worldwide auctions of fine and rare wine soared to a record $408.10 million in 2010, nearly double the previous year’s total of $233.35 million.

While the economy’s slow rebound was a factor, the bigger reason for the upsurge was a massive escalation in Hong Kong wine sales, which totaled $165 million, 157 percent above their 2009 tally. U.S. auctions rose 43 percent in 2010 to $154 million, but still fell short of 2008’s total of $165 million. Most notably, as predicted by Acker Merrall & Condit auction director John Kapon in 2009, this year marked the first time that U.S. sales were eclipsed in value by those in Hong Kong, a sea change that’s not likely to ebb anytime soon.

While more lots of wine are sold in the U.S., Hong Kong continues to bring in much more money per lot. In the U.S., roughly the same amount of lots (46,037) went on the block in 2010 as in 2009, with an average price per lot in 2010 of $3,600, up from $2,202 the previous year. By contrast, the number of lots on offer in Hong in 2010 rose to 17,000 from 10,146 in 2009, with a current average price per lot of $9,700 compared to $6,870 in 2009.

Hong Kong wine auctions target a different audience from those in America, with an almost exclusive emphasis on the rarest wines from the finest vintages. The fundamental difference between the two markets is that Hong Kong buyers are not particularly price sensitive, so auction directors funnel high-profile lots there. “Many Asian buyers are in the initial stages of collecting and when they first start out, they buy practically everything for whatever it takes because their cellars are basically empty,” said Charles Curtis, head of wine for Christie's Asia.

“From 1994 through mid-2008, U.S. wine collectors built significant cellars because they were not price sensitive in their pursuit of fine wine,” said Jamie Ritchie, CEO of Sotheby’s Wine Americas & Asia. “Now, Asian wine buyers have taken over that role and are likely to be driving demand for fine wine over the next 15 years. We expect to continue shipping our most important single-owner collections for sale in Asia and will sell more wine sourced in the U.S. in Hong Kong than in New York.”

Thanks largely to its spectacular performance in Hong Kong, Acker Merrall and Condit led the 2010 auction market with $98.5 million in worldwide sales, the highest total in the history of wine auctions ever achieved by a single auction house in one year. Sotheby’s followed with $88 million in global sales while Christie’s ended up third with $71.5 million.

Chicago’s Hart Davis Hart topped the domestic market with $39 million in sales, followed by Zachys with $34 million. Six of HDH’s seven auctions were 100 percent sold, and the firm also conducted the largest U.S. sale with an aggregate of $8.5 million. Spectrum Wine Auctions, an Irvine, Calif.-based auction firm, brought in $14 million in worldwide sales in 2010.

Of all the wines on the auction block, Château Lafite Rothschild proved the most sought-after in 2010—especially the 1982 vintage, which is highly coveted both in America and the Far East. In the first quarter of this year, the wine averaged $42,528 per case in the Wine Spectator Auction Index. By December, a case of Lafite ’82 climbed to $65,550 at Zachys New York. Yet the numbers pale against the $132,584 winning bid paid for a dozen bottles of Lafite ’82 at the Sotheby’s Lafite auction in Hong Kong this past October. At the same sale, a new world record for a single 750ml bottle of wine was established when three bottles of Lafite 1869 consigned from the château sold for a staggering $232,692 each, toppling the previous record of $156,450 paid for a single bottle in 1985.

The fourth quarter saw a flurry of high-profile sales around the world. Another world auction record was set in Geneva last November when an imperial of the acclaimed Cheval-Blanc 1947 sold for $304,375 against an estimate of $150,000 to $250,000. In New York on Dec. 3, Zachys sold 11 bottles of DRC Romanée-Conti 1969 for $102,850 (up 76 percent from its average auction price in third quarter 2010). A case of Domaine Leflaive Puligny-Montrachet Les Pucelles 1988 brought $5,808 (up 267 percent) and four bottles of Château La Mission Haut-Brion 1961 commanded $20,570 (up 119 percent). At Acker’s November sale in Manhattan, four magnums of Bruno Giacosa Barbaresco Santo Stefano di Neive Riserva 1997 traded for $3,172 (up 212 percent) and six bottles of Château La Tour-Haut-Brion 1978 brought $1,952 (up 198 percent).

Bargains were hard to come by throughout most of the year as the market never lagged. Nevertheless, there were select buying opportunities, even in the flush fourth quarter. At Acker in late November, a case of E. Guigal Ermitage Ex Voto 2003 sold in New York for $1,586 (down 62 percent.) At Sotheby’s New York in November, a case of Château Ausone 1982 fetched $3,025 (down 53 percent), and at Hart Davis Hart in late October, six magnums of Moët & Chandon Brut Champagne Cuvée Dom Pérignon 1999 brought $1,315 (down 46 percent). The best bet for the serious collector was a lot of five magnums of Château Latour 1982, a relative steal at $15,535 (down 48 percent), also at Hart Davis Hart.

Most auction directors predict continued strength in the 2011 global wine auction market, barring any setbacks to the economy. Nikos Antonakeas, Morrell’s auction director, quipped that the time to sell your Lafite—if you are not planning to drink it—is now.

Reflecting on 2010, Acker’s John Kapon said that the wine world has taken “a huge step toward becoming a true global market, with East and West coming together like never before.” But he sees more than sales in Asia in the cards for the future: “With so many potential emerging markets still to join the table, I feel strongly that this is just the beginning.”

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