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NEW YORK (Reuters Life!) - Floodwaters from the global credit crisis have seeped onto the top deck of the wine business.
Domaine Romanee Conti (DRC) 1990, which commanded more than $20,000 a bottle just a little more than year ago, sold on Saturday for $6,500 - a 67.5 percent drop in price.
Auction house Hart Davis Hart admitted that the price was at the low end of its estimates.
"We definitely saw some conservative prices," Paul Hart, the auction house's president and chief executive officer, said after the sale in Chicago.
The scenario is being repeated at other wine auctions throughout the country.
"The price of wine, particularly at the higher end, has gone through a two-year period of unprecedented increases. Not surprisingly, we now see a period of price adjustments," said Jamie Ritchie, head of Sotheby's Wines North America.
Auction houses tout their sales by the percentage of lots sold. In the spring Christies, Sotheby's, Zachy's, and Hart Davis Hart all boasted sell throughs of well over 90 percent.
A Hart Davis Hart auction in September of a single collector had a 100 percent sell through. The total from the sale of 1,746 lots of Chateau Lafite-Rothschild, Petrus, and DRC was almost $11.2 million, nearly $1 million above the top estimate.
What appears to have been the high-water mark for wine auctions took place the same week in October that the Dow Jones Industrial Average went into a freefall.
Six weeks and several auctions later, the sell through seems to have dropped to an average of 79 percent. A four-case lot of DRC 1990 was left unsold because the reserve price was not met.
The slump is also reflected in the Liv-ex 100, the wine industry's leading benchmark, which was down to 221.62 at the end of October, or almost 16 percent from its high of 262.71 in August.
Charles Curtis, head of Christie's North American Wine Sales, said after his house's October 25 auction there was "a softening of some prices, demonstrating that current economic conditions have made for a buyer's market."
After Christie's sale on Saturday in Los Angeles, in which 44 percent of the lots sold, Curtis said in a statement that it was taking another look at its prices.
"Like any market, the international fine wine market fluctuates ... as market leaders, we are actively reviewing our own pricing procedures and are advising both our buying and selling clients on the market situation as it continues to develop," Curtis said in a statement.
"Our outlook for the future is cautiously optimistic," he added.
Hart Davis Hart's sale on Saturday had estimates in their catalog that were lower than their auction six weeks earlier. Although the DRC fetched only a fraction of what it sold for a year ago, Hart is optimistic.
"We saw a lot of old faces in the audience on Saturday night that we haven't seen in a couple of years. There were a lot of us who have been through cycles before and they realize it's an opportunity," he said, adding that estimates for their December sale will be even more conservative.
"It's a bidder's market." he added.
Editing by Patricia Reaney