‘A strong end to the year for South Kensington Wine sales’, announced Caroline Holmes after Christie’s 1 December South Kensington sale was 66% sold by lot and 68% by value. When sales were at 90% sold in October, this latest result would have been considered poor, but post credit crunch, the previously unthinkable had become respectable. Whether or not there was a wistful hint in Ms Holmes’ post sale note of a more permanent ending is unclear but the new economic order has taken its toll. Although euphemistically deemed part of its ongoing strategic review of business, Christie’s is closing its South Kensington wine sales and concentrating its energies instead where the money is, by opening a wine department in Hong Kong under Michael Au, supported by David Elswood from London, and transferring Scott Torrence from Los Angeles to the New York office.

The wisdom of Christie’s decision to chase the action and refocus on top quality sales (and wine duties were abolished in Hong Kong in February) was underlined by polarised results in different parts of the world. Christie’s late November sale, its first wine auction in Asia since 2001, raised a promising HK$31.5m (£2.6m) from the sale of 231 lots, exceeding the pre-sale estimate of about HK$20m. The 127 lots from the reserve cellars of Château Latour did especially well, raising HK$18m (£1.49m), compared with the HK$10m (£0.83m) estimate. An auction of south-east Asian modern and contemporary art that followed fetched HK$28.5m (£2.35) against a pre-sale estimate of HK$26m (£2.2m), bucking the trend of a faltering market in London and New York, where Rothkos and Manets, among others, failed to attract buyers. A boon for some though, like Stanley Ho, the casino tycoon, who ‘only’ had to pay £130,000 for a 1.08kg truffle (£120 per gramme) compared to the record £214,500 for a 1.5kg specimen (£143 per gramme) he’d paid the previous year.

By the end of the year, wine sale prospects for vendors in Europe and the US were growing more dismal by the day as the bubble of inflated prices was pricked and the sagging airship fell out of the sky. On 25 October at NYWines/Christie’s, only 67% of 641 lots had been sold, achieving only £387,059 on a pre-sale low estimate of £636,805. Three days later at Aulden Cellars/Sotheby’s, only 70% of 190 lots found buyers, and by the time of Christie’s sale in New York on 21 November, a disastrous 69% of the lots remained unsold. In London, the Liv-ex 100 Fine Wine Index fell by 12.4% in October with 2005 first growth prices dropping by a quarter and other high fliers such as the 2003 Montrose and 2000 Ausone also down by more than 20%. In New York, the 1990 Romanée Conti, flying high at $20,000 (£13,000) a year earlier, lost 67.5% of its value and wine departments were reporting that even after inclusion of the premium, roughly four in every five lots were selling below estimate.

’It’s somewhat of a correction in that some wines have appreciated so steeply because of scarcity and the global expansion of the market and the new wealth over the last 10 years’, said Sotheby’s New York’s Robert Sleigh. Perhaps not surprisingly, the ‘correction’ appeared to be hitting hardest those wines that had enjoyed the most stratospheric rises. As Sleigh put it, ‘those with the furthest to fall like Lafite, which has seen an extraordinary couple of years, have done just that’. Yet even if the top wines have only returned to 2005/6 prices, the market appreciation of the last couple of years has been such that canny investors will have still made a satisfying return. For Rik Pike of Christie’s, it was ‘a blessing’ that there wasn’t another sale in prospect until March. ‘It’s been tough and what’s caught us out is that catalogues went to bed with estimates of prices before it became clear that there would have to a substantial relevelling’.

He wouldn’t have been alone in getting on the phone to clients to tell them that they were going to have to reduce their reserves if they wanted to sell their wines. As in every auction house art department, reserves and estimates have had to be completely revised with both Sotheby’s and Christie’s suggesting that estimates will have to be cut to perhaps 70% of previous levels. What’s been surprising has been the speed at which this has hit. One minute the market was riding high, the next it was crashing and burning. But amid the gloom, it’s worth remembering that such movements are cyclical and for every burst bubble, there’s the silver lining of an emerging buyer’s market. It’s still wait-and-see, but come the spring, with a new incumbent in The White House, much could change as prices could start to look cheap again. Wishful thinking? Perhaps but as the dust settles, at least we’ll have a clearer picture of the fates or fortunes that lie in store in 2009.

Auction results – top lots

At Sotheby’s Finest and Rarest on 15 October:

12 bottles of 1982 Château Pétrus sold for £39,100 (e: £24,000 – 32,000)
12 bottles of 1959 Château Lafite sold for £27,600 (e: £15,000 - £20,000)
5 magnums of 1982 Château Lafite sold for £21,850 (e: £12,000 – 16,000)

At Sotheby’s New York on 28 October:

12 bottles of 1990 Romanée Conti, DRC, sold for $151,250 (£97,179); (e : $170/240,000)
12 bottles of 2005 Romanée Conti, DRC, sold for $121,000 (£77,743); (e : $110/170,000)

At Sotheby’s Finest and Rarest sale in London on 12 November:

12 bottles of 1982 Château Pétrus sold for £25,300 (e: £24,000-32,000)
12 bottles of a 1990 Domaine de la Romanée-Conti Assortment sold for £14,950 (e: £13,000-18,000)

At Christie’s Fine & Rare Wines in London on 13 November:

12 bottles of 1945 Taylor’s Port sold for £7,475 (e: £5,000 – 7,000)

At Christie’s The Le Cirque New York sale on 17 November:

A 22 impériale vertical of Opus One, back to 1979, sold for $36,000 (£24,161); (e: $25,000 – 35,000)
1 dozen bottles of 1998 Château Pétrus sold for $24,000 (£16,107); (e: $25,000 – 35,000)
11 bottles of 2000 Château Ausone sold for $16,800 (£11,275); (e: $17,000 – 22,000)

At Christie’s sale of Finest and Rarest in New York on 21 November:

1 dozen bottles of 2005 Richebourg, DRC, sold for $19,200 (£12,631); (e: $18,000 - 24,000)
1 dozen bottles of 2005 Romanée-Saint-Vivant, DRC, sold for $19,200 (£12,631); (e: $16,000 - 20,000)
1 dozen bottles of Château Lafite-Rothschild sold for $19,200 (£12,631); (e: $24,000 - 35,000)