To sell a bottle of rare wine can be an emotional experience akin to parting with a work of art or piece of fine jewelry.
And yet, global wine auction sales are on the upswing, according to specialists. Jamie Ritchie, head of Sotheby’s global wine program, projects $90 million in sales by year’s end, which would top the existing record of $88 million in 2010.
Though nothing has topped the Jeroboam of 1945 Château Mouton Rothschild that sold for $310,700 in February 2007 at Sotheby’s, now may be the ideal time to either cash in or pick up that special bottle for your collection. Whether you’re downsizing your collection or adding a new treasure, doing your homework to secure the best price is important.
Direct sale versus auction
If time is of the essence and you’re comfortable with settling on a firm price, a direct sale may be the best choice. However, with an auction, the sky is the limit, says Charles Antin, senior international specialist and auctioneer at Zachys.
“A private sale is like a retail transaction; it locks you into the current price and is immediate,” he says. “An auction takes advantage of the competitive nature of an enormous buyer base. For example, with [the] Burgundy market hot now, anyone consigning their rare Burgundies are selling into a rising market.”
Selecting an auction house
Like any major transaction, it’s wise to comparison shop. The reputation and success rate of an auction house is paramount, along with the size and reach of its customer base.
Many houses have minimums based on the value of the wine lot, which can be one item or an entire collection. Also, the lot’s size and value can affect the seller’s fee, which ranges from zero to 18%.
“The seller’s premium often is set on a sliding scale based on the size of the consignment—the more wine, the less commission,” says Antin.
How the lot will be marketed is also important.
“Ask if the auction house has a strong international market, and if your wine collection will be seen by buyers from other collecting categories and not just wine buyers,” says Christopher Munro, head of wines and spirits for Christie’s. The auction house holds two live wine sales at its New York City location and four online wine sales per year.
It’s the auction house’s responsibility to appraise the wine and set a price. Munro stresses that sellers should submit important documentation well in advance, especially those with large collections.
“We need to carry out full appraisals and will often visit to inspect the collection, and maybe taste samples, if appropriate,” he says. “We would often plan an event with the client, and the longer the time we have to properly market the collection, the better.”
Sellers should provide documentation on each wine’s provenance, date and location purchased, storage history, current condition and photos.
When to sell
Most auctions take place between September and May. Ritchie oversees 25 auctions per year, divided between Sotheby’s New York City, London and Hong Kong locations.
“It is somewhat better to sell at a less busy time, but it depends on strength of the markets,” he says.
Online auctions are more frequent and good options for collectors who want to buy and sell in a shorter time frame. Zachys holds monthly auctions in addition to its eight live auctions throughout the year. Others even offer weekly online auctions.
Does the selling market matter?
“Overall, the market is global with consistent pricing, aside from a few anomalies in each,” says Ritchie. “Depending on the wine’s age and producer, we will recommend certain markets. High-value wines, certain producers, vintages and collections of specific wines may be better in Asia than Europe or New York. However, the growth of online auctions is making it easier to sell fine wine to buyers around the world. It’s become the most efficient way to present information that anyone can access at any time versus a print catalog.”
What’s in demand?
“Styles of wines may appeal to specific groups,” says Ritchie. “For example, white Burgundy tends to sell strong in New York and Hong Kong; Italian and California wines in New York; and Bordeaux and Burgundy everywhere. Scotch and Japanese whiskies are both growing areas globally.”
One example is the current offerings slated for the October 13 auction at Sotheby’s New York. A bottle of 1926 Macallan Scotch is priced at $700,000 to $1.2 million, a new lot estimate record for Sotheby’s.
What should buyers consider?
Join auction house mailing lists, and review past online sales and recent catalogs to compare what’s selling.
“Buyers should study the gaps in their cellar to decide what to purchase,” says Michael Davis, vice chairman at Hart Davis Hart (HDH), a Chicago-based global wine auction house and online retailer. “Also, review the profiles of the wines being offered and consider what is their drinking window, taste profile and how the wines fill their needs.”
HDH holds seven auctions annually. Its April auction is dedicated to the wines of Burgundy, while November is reserved for Bordeaux.
Early bidding can be beneficial. “At HDH, our auctions open for absentee bidding approximately three weeks before the sale,” says Davis. “Bidders should take advantage of that by reviewing the lots and placing early bids. If there is a tied absentee bid when a lot is offered live, the earliest bid wins the lot.”
Another consideration is the buyer’s premium to the auction house, which can range from 19.5–24%.
Finally, buyers should have perseverance. “Sometimes it takes patience to win the wine you’re looking for, but it’s always worth it in the end,” says Davis.
Whether buying or selling, when the auction gavel goes down, someone will raise a glass in celebration.