In 2012 Third Quarter, Wine Spectator Auction Index Falls Again

Is Château Lafite the culprit behind the Index's drop?
Oct 17, 2012

The Wine Spectator Auction Index, which tracks sales at fine wine auctions in the United States, fell nearly 3 percent in the third quarter of 2012, the sixth consecutive quarter that the index has registered a decline, albeit a modest one.

Since spring 2011, a flight from first-growth Bordeaux to lesser growths and premium Burgundies has caused global auction markets to tumble. In the third quarter of 2012, the index dropped from 315.54 points to 306.50 points. Domestically, six auctions comprising 7,578 lots went on the block for an aggregate value of $17.4 million, down 11 percent from the third quarter of 2011. The average price per lot in third-quarter 2012 was $2,300, compared to $3,616 in 2011.

In Hong Kong, the story was similar. Third-quarter 2012 sales totaled US$20 million compared to US$35 million in the third quarter of 2011. The average price per lot in the third quarter was US$6,713, down from US$7,965 in 2011. Despite this drop, Hong Kong has retaken its position as the world wine auction capital, a title it briefly surrendered to the United States in the second quarter of 2012.

However, percent-sold rates—a barometer of the strength of the market—averaged a healthy 92 percent in the United States and an even stronger 97 percent in Hong Kong in the third quarter of 2012.

Paul Hart, CEO of Chicago’s Hart Davis Hart (which has recorded four 100 percent–sold auctions this year), partially attributes the auction index’s decline in third-quarter 2012 to the “Lafite Factor.” A very large quantity of full-case offerings of Château Lafite Rothschild came on the market last year when prices were still high. “As the demand for Lafite declined, this [momentum] slowed,” he said. In the third quarter of 2012, for instance, Château Lafite 1982 averaged $37,967 a case, whereas a year earlier, it was fetching as much as $66,000 per dozen. During the same timeframe, Lafite 2000 slumped to $19,108 per dozen from $33,168.

Bordeaux listings in the auction index were down 8 percent overall from the previous quarter, led by the 1990 vintage, which dropped 17 percent. Château Cheval-Blanc seemed particularly out of favor in the third quarter; the 1990 vintage was down 44 percent from its second-quarter auction index average to $786 per bottle, and the 1989 vintage was down 32 percent to average $378 per bottle. Among the bright spots: Château Cos-d’Estournel 1989 rose 41 percent to average $178 per bottle, and Le Pin 1982 climbed 29 percent to $5,166 per bottle. Château Haut-Brion 1998 soared 209 percent to average $398 per bottle.

The Burgundy category, which is tracked separately from the auction index, barely budged this quarter, down 0.32 percent. Yet at Acker Merrall & Condit’s Sept. 8 auction, hard-to-come-by Burgundies proved exceptionally strong. A case of Faiveley Musigny 1959 sold for $27,060 to an aggressive Internet buyer. A single bottle of Domaine de la Romanée-Conti Romanée-Conti 2009 was snapped up for $17,220 (up 23 percent). Twelve bottles of J.F. Coche-Dury Meursault Les Perrières 2002 commanded $13,530, and a case of Leroy Romanée St.-Vivant 1962 brought $29,520.

California was also relatively flat, rising just 0.69 percent, though some wines outperformed the category. Shafer Cabernet Sauvignon Stags Leap District Hillside Select 1994 increased 25 percent to average $390 per bottle, while Araujo Cabernet Sauvignon Napa Valley Eisele Vineyard 1994 was up 22 percent to average $221 per bottle. A case of Heitz Martha’s Vineyard Cabernet Sauvignon from the iconic 1974 vintage sold at Sotheby’s in September for $12,250 (up 53 percent).

Rhône reds, Vintage Port and Italian estate bottlings experienced little or no change. Exceptions were Château de Beaucastel Châteauneuf-du-Pape 1998, which averaged $117 per bottle (up 29 percent), and Tenuta dell'Ornellaia Toscana Masseto 1999, at $559 per bottle (up 27 percent).

Diversity seemed to be the buzzword of the season, observed John Kapon, CEO of Acker Merrall. “While the bread of the market continues to get buttered, collectors are looking beyond the old standbys. Our last auction in Hong Kong contained a wide array of offerings from Champagne, the Rhône, California and Italy with labels like Screaming Eagle Cabernet Sauvignon and Leroy Romanée St. Vivant featuring prominently on the sale’s top 10 list.

”Pre-1982 and older vintages are also very much in demand, as buyers seem to be focusing on more mature wines. I look for palates to keep expanding and trying new things, and for the market to remain vibrant for the rest of the fall.”

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