August 3, 2007 - Updated Nov. 26 - Jack
A Guide to
Buying Wine at Auction
This article is for the wine novice and wine enthusiast. It is based on what I personally know about this subject – almost all learned by first-hand experience.
Let’s start by dividing wines into two groups: Collector Wines (wines that go for more than $150) and Drinking Wines (wines that go for under $150). I’m not saying that there are no collectible wines that cost less than $150 – I just need to delineate them into two groups.
Buying Collector Wines at Auction (and Charity Auctions)
This is the category which gets all of the press. After every big auction, the prices seem to ratchet up to another level for a number of reasons: 1) Some long-time collectors have sold pristine/perfect bottles and buyers are willing to pay more for such provenance. 2) Some think these bottles are excellent investments and these “investors” are driving up prices. 3) Business executives are buying these bottles to impress clients (as either gifts or for a dinner). 4) Worldwide demand, particularly from Asia, is growing.
Collector Wines are mostly sold by the largest auction houses: Sothebys, Christie’s, Acker Merril & Conduit, Bonhams & Butterfield’s, Chicago Wine Co., etc., etc. They each tend to hold an auction every two months. The auction houses sell* a catalog for about $35 (which can also be downloaded for free), which is released about two weeks before the sale date. The auctions often start on a Saturday morning. (*Previous auction buyers often receive future catalogs gratis in the mail.)
Collector Wines are also the ones that large auction houses make a lot of money on. I’ve been told that they lose money on all of the lesser lots.
Lot size varies, generally from 1 to 12 bottles.
Mixed lots are both good and bad. Good in that they tend to go for lower prices than the lot is worth. Bad in that they tend to have wines you don’t want with ones that you do.
Of special note, when there are consecutive duplicate lots, often the winner may purchase the duplicate lots for the same price (check the auction house rules). I think the theory behind this is that it might drive up the price of the first lot; experience shows sometimes yes, sometimes no.
Collector Wines often go for really wacky prices at Charity Auctions. Some even get resold again and again at Charity Auctions; the gift that keeps on giving. The fewer the number of wine-savvy people at the event, the greater the possibility of getting something you might want for a reasonable price; but it’s oh-so-random. Note: At the most prestigious of these charity events prices can often become absurd – wines going for 5-50 times their actual value.
Buying Drinking Wines at Auction
This is the category which interests me the most. Depending upon the auction, you can find both, old and recently released wines, at cheaper-than-retail (well, usually the opening price is well below retail). With general wine prices increasing for certain appellations, like Napa, the older wines are a bargain. What’s crazy (in a great way) is that you can find wines which are 8-20 years old selling for less than the current release of a comparable quality. (The older wines may even be superior in quality.) Further, you’re getting aged wines! Who-hoo! Of course, there is more risk, as for most lots, you don’t really know how the wines were transported from the winery to the cellar, etc.
But do you want a case of that?
Many lots are twelve bottles in size. This can be frustrating, as you might want 3 or 6 bottles rather than a whole case. (Particularly if you haven’t tasted a bottle from that lot; who knows what it’s really like?) But perhaps you have a few friends who will occasionally go in with you on such lots?
Where did the wine come from? Provenance or the history of the wine should always be considered before bidding. Some lots may state the provenance: e.g., Property of a Gentleman in California (removed from a temperature controlled storage facility). Other lots may not state where the lot came from leaving you to decide from examining the bottles, or making inquiries, as to the prior storage conditions. When buying older wine, it is very difficult to determine the full provenance. This is a risk. Occasionally, wine that has come from a noted collector or collection is auctioned. (And, of course, fraud is a problem with Collector wines.)
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