HDH Wine

Lafite’s ‘Godzilla’ Tops Wine Auctions as Hong Kong Sales Boom

By Elin McCoy


Sipping Cristal champagne and 39 other blue-chip labels, New York wine lovers kicked off the autumn auction season at a two-night Acker Merrall & Condit sale on Sept. 10. They bid big, especially for Chateau Lafite and Romanee Conti, spending $4.9 million -- a sign auction prices are still rising.

“Lafite gets stronger each month, like a well-fed Godzilla,” said Acker’s John Kapon, as he headed off for the company’s two-day sale in Hong Kong on Sept. 17-18, which totaled HK$68.1 million ($8.8 million), the second-highest ever for a wine auction in Asia after Acker’s May sale.

The same weekend, Christie’s International sold HK$48.1 million of wine in the city, led by an 18-bottle lot of 2000 Lafite that fetched HK$420,000, against a high estimate of HK$300,000. Both auctions sold every bottle on offer.

This week a flood of high-end Bordeaux and Burgundies goes on the block at six U.S. auctions in New York, Chicago, and Beverly Hills.

“Prices are high enough to induce people to sell and still reasonable enough for new collectors to buy,” said Charles Curtis, head of North American sales at Christie’s. He’s recruited Mandarin speakers to man phones on Sept. 24 for mainland Chinese bidders.

The auction market, which slumped two years ago in the global recession, has bounced back.

“All Bordeaux prices have rebounded,” Jamie Ritchie, Sotheby’s head of wine in North America, said about its Sept. 25 sale. “In times like this, people want to go with rock solid items.”

Bottles of 1986 and 1970 Chateau Lafite-Rothschild and wooden cases of various vintages, including the fabled 1982. The wines will be auctioned off on September 24 by Hart Davis Hart at Tru restaurant in Chicago. The single owner collection sale, the Fox Cellar II, includes 103 lots of Lafite; the estimate for a case of the 1982 is $32,000 to 48,000. Source: Hart Davis Hart via Bloomberg


Sweet Spot

The high prices for 2009 Bordeaux futures are inspiring people to buy earlier vintages, said Ben Nelson, president of Chicago’s Hart Davis Hart Wine Co.

“I think 2000 Bordeaux is the sweet spot,” he said. “What would you rather have, a 2009 that won’t be available for two years or a 2000 for the same price?”

There’s plenty of Bordeaux in Hart Davis Hart’s second sale of wines from the Fox Cellar, a stellar single-owner collection, on Sept. 24 and 25. Fox Cellar Part 1 went on the block the same week Lehman Brothers Holdings Inc. collapsed, yet pulled in $11.2 million. Part 2’s 17,000 bottles, with a high estimate of $6 million, include 88 lots of Mouton and 103 of Lafite.

“When prices go high on Lafite, it brings other prices up,” Nelson said.

New York’s Zachys, fresh from a nearly $5.5 million Hong Kong sale on Sept. 10 and 11, highlights the first vintages of Guigal’s cult “La-La” wines -- La Mouline, La Turque, La Landonne -- from the Rhone Valley on Sept. 23 and 24.

Koch Lawsuits

As billionaire Bill Koch continues his lawsuits over wine auction buys he alleges are fakes, the question of provenance looms large.

California-based auction house Spectrum Group International Inc., which held its first wine sale in 2009, has increased transparency by posting 360-degree images of each lot online (you can rotate a bottle by moving your mouse).

Spectrum made its name with coins and stamps. Jason Boland, its 28-year-old technology whiz president of the wine division, says he’s attracted consignors by offering up to 50 percent cash advances of the pre-sale estimate. The Sept. 24 auction features rare vintages from Napa’s Chateau Montelena, first growth trophy wines, and a 1790-1800 Madeira (estimate $1,200) discovered in a shipwreck off the coast of Georgia. Dallas, Texas-based Heritage Auctions is also planning to add wine sales in Beverly Hills later this autumn.

Still, the big story remains Hong Kong, which outperformed U.S. auctions by value in the first half of 2010. Spectrum simulcasts its auctions there. As Boland says, “It’s sucking up the best wines from the entire world.”

Cooling River

Sotheby’s has as many as four October single-owner sales in Asia, which it estimates will pull in $20 million. Oct. 2 is Texas real estate developer Marcus Hiles’s mega-collection of Domaine de la Romanee Conti, stored in a cellar cooled by an underground river.

But the Chinese love affair with Lafite ensures that the powerhouse sale this fall will be Sotheby’s Oct. 29 Hong Kong Lafite auction, with 139 vintages, 1869 to 2008. What makes it a once-in-a-lifetime event is that the wines come direct from the cellars of the chateau.

“The timing was right, Lafite is the magic name at the moment,” said Serena Sutcliffe, head of Sotheby’s international wine department, by phone from London, where she was preparing for the department’s 40th anniversary sale on Sept. 22.

Lapping Up Lafite

Sutcliffe views the great Bordeaux as a wine trailblazer. “In the 19th century Lafite was appreciated by European aristocrats, then it was embraced by the U.S. in the 70s and 80s,” she said. “Now it’s conquering Asia.”

Lafite’s high prices -- the 1982 increased 1,137 percent from August 2000 to August 2010 according to electronic wine exchange Liv-Ex -- are “bringing out supply,” one auction director said.

“I can’t afford to drink it,” said importer Brian DiMarco, who’s selling 50 lots of wine at Christie’s this weekend, including bottles of 1995. Even Carruades de Lafite, the chateau’s second wine, which he bought at $600 a case, is worth four or five times that.

So which wines haven’t bounced back? The consensus among auction directors is that prices for top wines from the Rhone, California (except Screaming Eagle and Harlan), Italy, and Romanee Conti’s Echezeaux and Grand Echezeaux aren’t yet at 2008 highs, and second-growth Bordeaux is still reasonable.

Large formats, which in good times sell for a premium, are definitely still at a discount. Unless, of course, they’re Lafite.

(Elin McCoy writes on wine and spirits for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are her own.)

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