Wine auction market shrinking, Lafite bubble bursts

Tue Oct 23, 2012 12:00pm EDT
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By Leslie Gevirtz

NEW YORK (Reuters) - The global auction market for fine wines, which saw more than $500 million in sales in 2011, is expected to shrink to about $400 million this year as supplies and credit tighten and bidders back away from Bordeaux, experts said on Tuesday.

"Bordeaux accounts for 50 percent of the (auction) market, Burgundy 35 percent, which means that Italians, Californians, cults make up the rest," John Kapon, auctioneer for Acker Merrall & Condit, explained.

"Now, Bordeaux is down 30 percent (in price), in some cases 50 percent - the Lafite bubble has burst," he added.

Chateau Lafite-Rothschild, one of the five Premiere Cru Bordeaux, has seen its 12-bottle cases of 1982 that regularly sold at auction for $60,000 and even $80,000 as recently as two years ago, drop to $40,000 or less.

The Wine Spectator Magazine Auction Index, which tracks fine wine auctions in the United States, fell nearly 3 percent in the third quarter. The average price per lot in the quarter was $2,300 compared to $3,616 for the same period a year earlier.

Jamie Ritchie of Sotheby's believes prices will flatten out before resuming a slow but steady rise.

"Not only do you have to sell more to maintain the same sales levels, there is also less wine coming onto the market," he explained.

Charles Curtis of Christie's was more optimistic. He said significant price gains for top Burgundy have erased some of the losses in Bordeaux and other categories, particularly wines from Italy and the Rhone, are also showing more strength.   Continued...

A superlot of 55 bottles of every vintage of Domaine Romanee Conti (DRC) released between 1952 and 2007, with the exception of 1968 which was never released, are shown at an auction preview in Hong Kong December 7, 2011. REUTERS/Bobby Yip