If you're thinking of selling wine by auction, it's important to remember that where and when you sell can make an enormous difference to the results.
Historically, the live-auction calendar in the United States ran from Labor Day (the first Monday of September) to Memorial Day (the last Monday of May). It was unheard of to have an auction after the Memorial Day weekend. In the early 2000's, however, that changed, as some auction houses started having special summer live sales. Despite this, though, live auctions in summer remain rare.
People used to feel that the fall was the best time to sell at auction, believing that collectors who had been "starved" over the summer by a lack of sales and shipments would bid feverishly. But this is a myth, as the accompanying chart shows. The fall – or Q3 – is not the strongest sales period. And nor is the Q4 quarter necessarily made stronger by people buying gifts for Christmas. Another myth is the idea that the January–March (Q1) quarter is boosted by people spending their annual bonuses.
The fact is that it is the wines on offer, the venue, and whether it is a special sale (of, say, a prized collection) that can make all the difference to the outcome of an auction. A single-seller sale will, regardless of timing, command higher prices if the provenance is strong and well explained.
Here are the quarterly results from the Wine Market Journal 150*:
*Note: One issue with the WMJ 150 is that it is heavily skewed to Bordeaux. However, in the past year, Burgundy has been increasingly sought after and Bordeaux has not.
Type of wine sold
In my opinion, the type of wine you are selling can be just as much of a factor in the prices achieved as the auction house you choose and the venue.
Burgundy, which is incredibly hot at the moment, has had amazing results in the annual La Paulée auction, a Burgundy celebration hosted each year by U.S. wine industry figure Daniel Johnnes in either San Francisco or New York. But Burgundy is in such demand now that wines from top producers are commanding a premium regardless of the auction venue. The best wines are made in such small quantities that the market for the top brands is unlikely to soften any time soon.
Bordeaux has fallen from favor of late, with relatively high release prices for comparatively large quantities of production when compared to some other highly collectible wines. Approximate production for first growths goes from the largest (about 36,000 cases from Mouton) to the smallest (about 18,000 cases from Haut Brion). Historically, older Bordeaux have had the best results in New York City and Hong Kong. Current signs point to a coming Bordeaux re-emergence in the live-auction market. It is cyclical, and the last year that Bordeaux was "hot" was 2008, right before the crash. It’s time for it to bounce back.
Fortified wines: Madeira, port, aged Banyuls and Maury, and Rutherglen muscats historically sell best in Q3, as Americans are stocking up for the holidays. This can also be said for some top sweet wines.
California super-cult wines appeal to an international crowd and do well in New York City and Asia. Older Californian classics seem to do best in San Francisco or Los Angeles, where collectors understand, appreciate and battle over them. The same is also likely to be true of some classic Australian wines, which do better in domestic auctions than they would in any other market.
Rhône Valley and Italian wines are not as affected by the geographical location of a sale as much as by the state of the market and the ability of an auction house to promote them.
The location of the sale room can make a huge difference to the outcome of an auction. In the live-auction market, the major venues today are in New York City, Hong Kong, San Francisco, Chicago, Los Angeles, London, Paris and Geneva.
The European cities have been holding auctions for hundreds of years and have a well-established clientele who provide strong bidding. This attracts wines of amazing provenance.
New York City was the No. 1 auction location for a few years but has been unseated by Hong Kong. In my opinion, this will swing back. The market for fine and rare wines at auction is slowing in the Chinese economic powerhouse. Many collectors have filled their lists, and although they will continue to buy new releases, a drop in consumption means they will not need to buy for replenishment in the frenzied manner that has driven this market in the past.
In fact, when former Hong Kong chief secretary Henry Tang sold some of his top wines in March – fetching $6.2 million (including buyers' premium) – it was the first big Asian collection to go on the block. This is a scary concept, because while I believe Tang's wines were of impeccable provenance, many other buyers in Asia have bought from dubious sources, including auctions. Alarmingly, many fakes have been dumped onto the Asian market by unscrupulous vendors in order to get them out of the United States and away from American investigators.
Before putting wine up for auction, it is vital to discuss with your vendor their marketing plan for your consignment. Will you have photographs? What will your placement be in the sale? (It's best to be in the front three-quarters of the offerings for live sales, but for online auctions position is irrelevant.) Make sure that what you agree with the auction house actually happens. Some strong marketing can make a huge difference to the final hammer price.
Finally, will your wines be sold live, online or a mix of the two? Historically, internet auctions were the dumping ground for the cast-offs of a live consignment. However, they have recently been revolutionized by major live-auction houses adding an internet option to complement their regular sales. This development has made major wine auctions a year-round event.
Today, all the major brick-and-mortar auction houses, except Sotheby’s, offer an internet option. While internet auctions have historically been viewed as "lesser" venues, my clients' results have proved that opinion wrong. Some of the strongest results I have had in the past two years have been from internet sales. Some houses hold the same strong expectations for their internet auctions as they do for their live sales, but they can offer smaller quantities without having to bunch them together in mixed lots, which risks losing value for the consignor.
Wherever you choose to sell your wines, do factor in the costs of sale in your negotiations. Sellers' fees and costs can add up, and some houses have many hidden fees – including cataloging, storage or re-offer levies – that can drastically affect the total amount you receive.
As with any commercial transaction, ask lots of questions. Make sure your wines are going to be sold in the best venue and on the best terms possible. Reputable auction houses welcome your input as a consignor. The more information you can give them about provenance, the better they can market your wines.
It is a relationship, beyond a contractual deal. Enter into that relationship as an active participant, be sure you are dealing with a reputable auction house, and enjoy the process.
*Maureen Downey is an expert on wine fraud, and is the owner of San Francisco-based Chai Consulting, a firm which advises collectors of fine wine. The views expressed in this article are her own and do not necessarily represent those of Wine-Searcher.