Investment Train Keeps Rolling - October auctions

POSTED ON 01/10/2008

With Aubert de Villaine in attendance, this year’s tasting for Corney & Barrow’s offer of the 2005 vintage reds of the Domaine de la Romanée-Conti offered a horse’s mouth opportunity to find out if the great Burgundy domaine is able to prevent customers from cashing in their DRC chips instead of drinking the wine. The urbane de Villaine said that he’s so concerned about DRC’s investment value and status that he’s on a mission to try and prevent DRC from being traded as a pure investment. To that end, Corney’s offer specifies in that ‘the domaine’s focus is on private customers and as a consumer rather than a speculator’. Is it enforceable? Apparently not, if the results of recent auctions are anything to go by. The US is well-known for the vast sums collectors are prepared to shell out for DRC, viz a case of the 1985 DRC Romanée-Conti selling for $157,300 (£76,730) this year at Aulden Cellars-Sotheby’s. At Christie’s London sale of Finest and Rarest on 26 June, DRC took the top five spots with £50,600 paid for 12 bottles of 1964 Romanée-Conti, or £703 a glass by my calculations.

Plus ça change in the case of DRC’s Bordelais investment alter ego, Château Pétrus. I have heard Christian Moueix protest and seen him wring his hands in genuine anguish at the idea of Pétrus being pedalled as a mere investment vehicle. And yet thanks to an assiduous luxury brand policy of building demand by creating a mystique around Pétrus rarity value, that’s precisely what has occurred. After languishing for a while in the relative doldrums, Pétrus is right back up there as one of the greatest wine investment icons of all time. At Christie’s sale, the 1982 vintage, not long ago under £20,000, fetched £32,000 on an estimate of £25,000 - £30,000, a case of the 1990, previously unsaleable for much more than £12,000, sold for £23,000, while at Aulden Cellars-Sotheby’s, a dozen bottles of 1961 Château Pétrus sold for $102,850 (£50,170). What can a poor icon owner do except watch, Knut-like, as the forces of human nature dictate what shall be.

It’s notable that despite the very high prices obtained for these icons in great vintages, the time-honoured age gap between young and old is gradually being eroded as older vintages start to falter and younger vintages grow in demand. In the case of 1961 Bordeaux, it appears that average values, at least in the US, have been brought down by relatively poor performances due in part due to varying condition and perhaps a falling-off in demand for more mature vintages among younger collectors weaned on more youthful tastes. In re-setting its 100-index, the London wine exchange Liv-ex has now removed all wines from the 1982 vintage from its top 100 and substituted in their place 11 wines from what they call ‘the similarly lauded 2005s’, with condition issues again being a factor. ‘By removing the component wines from the index when they reach 15 years from vintage the price distortion of condition issues is reduced’, says Liv-ex.

The reputation of the 2000s continues to skyrocket along with prices: £14,375 paid for a case of Ausone, £10,925 for Lafite and £10,350 for six bottles of Le Pin at Sotheby’s on 25 June and £11,960 for six bottles of Pétrus at Bonhams’ London sale on 9 July. At the same time, as Stephen Mould points out, demand for the 2005s appearing in depth at auction for the first time is remarkably strong. At Sotheby’s sale on 25 June, a case of 2005 Latour sold for £9,200 (e: 7,800 – 8,500), Cheval Blanc £7,820 (e: £5,800 – 6,500), Haut-Brion £7,130 (£6,000 – 7,000) and Mouton-Rothschild £5,290 (e: £4,200 – 5,000).

It will be interesting to see if price distortions and condition issues are brought into focus by the renaissance of Hong Kong as a potential rival to London and New York in the light of Hong Kong’s abolition of taxes on wine and beer to boost business development. Since the announcement on February 27 this year, the influx of auction houses eager to cash in on the potential cash bonanza from the new Asian elite has included San Francisco-based Bonhams & Butterfields and the New York-based auction house Acker Merrall & Condit which broke all previous wine auction records when it sold $8.2m (£4m) worth of wine at its first Hong Kong auction. On 29 November, Christie’s International Wine Department will conduct hold its first wine auction in Asia since 2001 featuring around 250 selected lots, with a selection of 150 lots from Château Latour expected to realize in excess of HK $10 million (£655,000). London and New York will be watching Hong Kong with interest, and perhaps even a touch of anxiety.


• Christie’s London on 26 June raised £1,630,364 with 91% sold by lot and 96% by value.

• Top lot was a case of 1964 Romanée-Conti Grand Cru which made £50,600 (e: £30,000 – 40,000).

• 88 lots of Marques de Riscal made £45,000 with £1,840 paid for a single bottle of the 1863 and the 1900 and $1,610 for a bottle of the 1898.

• At Sotheby’s on 25 June, a total of £663,682 was achieved with 96% sold by lot and 99% by value.

• Top lots: £14,375 (e: £10,000-14,000) for 12 bottles of 1982 Château Latour, a magnum of 1971 Romanée Conti DRC (e: £12,000-18,000), six bottles of 1999 La Tâche, DRC (e: £11,000-14,000) and a case of 2000 Château Ausone (e: £11,000-16,000).

• At Sotheby’s London on 23 July, £674,141.50 was achieved with 90% sold by lot and 91% by value.

• Top lot: £23,000 (e: £22,000-30,000) for a case of 1990 Château Pétrus

• At Bonhams, London, on 9 July, a total of £653,131, was achieved with 72% sold by lot and 81% by value.

• Top lot: £18,400 (e: £14,000 – 16,000) for a case of 1982 Lafite.

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