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Uncorking Wine Auctions
Celebrated Living Magazine

Wine auctions attract those in search of rare vintages, great investments, or bargain prices on some of the best wines in the world. Writer CHRIS WARREN goes behind the scenes at one to find out what's up for bid and who’s buying.

If you were to focus exclusively on the middle-aged auctioneer standing at the podium – who is speaking with the rapid cadence of a drumroll, while simultaneously scanning the room so as not to miss anyone’s eager bid – it would be easy to imagine him selling just about anything: antiques, jewelry, maybe even livestock. But a glance around the room of Chicago’s swank TRU restaurant is enough to drive home the point that this isn’t just any auction. Indeed, two large-screen television monitors bookend the podium, alerting attendees to what’s currently up for sale; in the back of the room, well-dressed men and women take live bids over the phone and via the Internet in real time. Despite the 9 a.m. starting time, those in attendance alternate between sips of coffee and champagne.

For more than three years, the Hart Davis Hart Wine Co., or HDH, has been holding auctions that attract oenophiles, either in person or virtually, from all around the world. On this bright, crisp autumn day, bids for rare and extremely coveted Bordeaux, Burgundy, and California wines – ranging in price from a couple hundred bucks for a one-bottle-lot to $50,000 for a case of 1982 Chateau Le Pin – come not only from the large crowd clutching paddles in the room, but also stream in from throughout Western Europe, Russia, China, Brazil, and even Turks and Caicos; in fact, the recent weakness of the dollar has attracted intense interest from international buyers. In total, 99 percent of the wines offered on this day will be sold for a final tally of close to $4 million.

The dynamics of a wine auction can be somewhat paradoxical. The majority of attendees are private collectors who – since the world of people interested in purchasing rare wines is relatively small, albeit growing – know each other. This gives the event a quasi-reunion feel, with old friends sharing a bottle of wine and swapping stories. But the convivial atmosphere can quickly evaporate when competitiveness over a particular wine gets fierce.

Paul Hart, who founded Hart Davis Hart with wine industry veterans Michael Davis and John Hart and is one of the auctioneers, recalls talking to a collector who had made it a point to thwart another bidder every single time he bid. “Sometimes it’s egos at work,” says Hart, who started his career at Christie’s auction house and later became a co-head of Sotheby’s North American Wine Department. “This guy wanted to deflate his competitor and get him out of the room, and he was willing to spend $10,000 to do it."

Getting the most from an auction

As president of the Hart Davis Hart Wine Co. and one of the firm's chief auctioneers, Paul Hart (shown at left) has a great deal of auction experience. Here are his tips to help attendees, particularly novices, get the most from an auction.

Do your research. Auction catalogs are available three weeks before an event, either in print or online. “Do your research on the market value of the wine you want, and decide what you’ll pay for a wine before you walk into the auction room,” says Hart.

Read the conditions on each lot. Some wines have been passed down from family member to family member for years or have been sold and resold by collectors and may not be in great condition. “If you are collecting a wine, a label tear might be a big deal. If you are drinking a wine, it probably won’t matter at all and you’ll maybe even get the wine at a lower price,” says Hart.

Know what you like. Critics don’t know your taste. Learn what you like by tasting as many wines as possible, and then bid accordingly. HDH also offers a taste of the wines up for sale 30 minutes before they’re auctioned.

Arrive early. Showing up early in the day will ensure that you can find a good seat, where the auctioneer is certain to see you. Or, make yourself conspicuous. “Some bidders are known for wearing bright-colored shirts that will catch the attention of the auctioneer,” says Hart.

Stay all day. After lunch, when the crowd thins a bit, is when deals are much more likely.

Bid online. If you can’t physically make it to an auction, you can still send in online bids. – C.W.

 

While that sort of pique-filled combat is likely to flare up at any HDH auction – Hart Davis Hart will hold eight events in 2008 – the vast majority of purchases are either more personal or strategic. Stefan Blicker, an owner of St. Helena, California-based Blicker-Pierce-Wagner, a high-end retailer specializing in the kind of old and rare wines HDH sells, attends auctions with dual purposes, one of which is essentially public relations. “We like to be present at certain high-level functions where being there shows you are someone who is serious and playing in that circle,” he says.

But his primary reason for attending is to obtain the kind of wine his upscale customers would want to buy – and hopefully at a bargain price. “The typical person here [at the auction] is a consumer, so they can bid up to fair retail price, and in some cases much more,” he says. “But we need to resell the wine, so we buy at a lower margin than a consumer would.”

Also present at auctions are sommeliers, often bleary-eyed after working until 2 or 3 a.m. Andrew Green, wine and spirits director for Bacchus Management Group, oversees wine programs for Bay Area restaurants such as Spruce and The Village Pub and says he attends about a dozen auctions annually. His reasons for attending include supplementing wines he can’t get from his normal distributors and “fleshing out” sections of his restaurants’ wine lists. “I tend to go to auctions looking for bargains and to stay abreast of the market,” says Green.

Then there are the people who look at wines in the same way that others look at stocks – as investments to be bought at a cheap price and sold when they accumulate value. “They’re going to come and buy what they feel is a bargain. We have collectors with thousands of cases and they’re constantly trading in and out with us and also making good decisions about what’s undervalued in the market,” says Paul Hart, HDH’s president and chief operating officer. “It’s very much like portfolio building.”

Who actually attends and bids on wine at a Hart Davis Hart auction has absolutely no impact on their three-month-long preparation for the event. The first step is to assemble the wine to sell. In most instances, the wine comes from multiple sellers, or consigners, and Paul Hart says the aim is to get a nice balance of wines, both in terms of geographic origin and price.

In rarer instances, HDH will hold an auction where everything comes from just one cellar, such as one last year when they sold a portion of the collection of the late restaurateur Steve Verlin, who owned the New York restaurant Veritas. That auction alone had close to 2,000 separate lots for sale and generated $7 million in sales.

Regardless of who is selling, HDH, which also has a retail business, takes its time meticulously researching the provenance of the wines, essential information for any serious buyer. This means not only finding out where the seller originally purchased the wine, and even checking receipts, but also going and inspecting storage facilities to make sure the bottles were stored at the proper temperature and humidity. The process, which involves someone at the company literally inspecting every bottle that goes on sale, can sometimes yield surprises. “I tasted through a cellar recently and it wasn’t quite right, but I couldn’t put my finger on it,” says Hart. “What I came up with was that it was near an el overpass and the wines were jostled for decades.”

HDH is also careful to include any blemishes or problems, however slight, in their catalog descriptions. This sort of blunt frankness has earned the company high marks from buyers. “Their attention to detail is meticulous; their bottle condition descriptions are minutely detailed, better than other auction houses,” says Blicker, whose company spent close to $50,000 at the autumn auction. “We put them a notch above the other auction houses.”

HDH holds wine auctions throughout the year at TRU. This September 19 and 20, the company will have its largest “single-owner sale” – important because the wine’s provenance can be easily ascertained and evaluated – a cellar including highly coveted vintages of first growth bordeaux and burgundy from Domaine de la Romanée. Their estimated value? Between $5.5 million and $7.5 million. Worth toasting, indeed.