Completely nutso auction price

[Musigny 151]

Sotheby’s lot 162
Recently closed
12 bottles Beychevelle 1975


STILL CANNOT BELIEVE THIS

$5000

[stefan]

Someone accidentally added an extra zero. It happens.

[Winona Chief]

I think you are right about that, Stefan - can’t believe anyone would pay that for 1975 Beychevelle. I have had very good experiences recently with 1975 Bordeaux but they were ones that had mostly cost $50 to $100.

Chris Bublitz

[jal]

Too much money chasing scarce assets.

On Winesearcher, only one store in the US has it for $265 a bottle

[Nicklasss]

Maybe it was the last Rudy case of 12 fake bottles that exist. Who knows?

[JimHow]

I’m wondering how it got bid up that high. So there were at least TWO bidders who thought it was that valuable?

[Musigny 151]

It’s genuine, and yes there is more than one idiot at work here.

[JimHow]

The estimate was $450-800....

[marcs]

I just responded to your post on Wineberserkers on this, so I'll replicate here. In general that Sotheby's auction was pretty nuts, made HDH look cheap. What was especially striking to me was how often prices were far in excess of retail on widely available, not-rare, easy to find Bordeaux. E.g. 2009 Lynch Bages for $365/bottle for a case, when individual bottles are widely available on Winesearcher for $200-250 a bottle, 2009 Troplong Mondot $291/bottle for a case, Winesearcher $180-200 per bottle, etc. In older Bordeaux too. 1986 Gruaud for over $400 a bottle when it is $250 or less on Winesearcher, 1985 Ducru Beaucaillou for $365 a bottle when it is widely available on Winesearcher for about $260, etc.

The Beychevelle you quote is amazing but at least that is sort of hard to find and was not otherwise listed on Winesearcher. Maybe there was some weird sentimental value. All those other bottles have many, many Winesearcher listings.

In general it seemed like retail prices were a floor, not a ceiling in that auction. Just get the sense that people were bidding who are so rich that they think of the price of wine as a rounding error. Maybe types like that are waking up to the fact that Bordeaux is underpriced compared to Burgundy for the same quality wines...I always thought a Burgundy-style price runup was impossible in Bordeaux because production volumes are just too high, but we'll see. There has been a major price increase just over the last year.

Possibly wine, like Bitcoin and commodities, is seeing the impact of the huge growth in the money supply over the last year. There is a lot of hidden inflation out there I think.

[AKR]

Someone could be shopping with a stolen card number and - who knows - might be able to get away with it.

[Claudius2]

Guys
Ive seen some crazy bids like that over the years and back in Australia I recall the auctioneer refusing to accept a similarly unworldly bid as he thought it was either fake or fraudulent. Not sure what happened after that.

By the way I have drunk quite a lot of 1975s as they were cheap during the 90s in Australia. The Beychevelle was a good wine but not a great one at all. Typical firm tannins of the vintage but without the fruit of say, LLC or Ducru or the best Pessac wines (HB and LMHB excelled in that vintage).

It is weird. I thought that the COVID-19 crisis would reduce auction prices but the opposite has happened and Bordeaux has done well at the auctions I’ve done online over the last year both in Europe and locally.

[JimHow]

Was this from a famous cellar or something?
Are wine auction prices experiencing Covid-related increases for some reason, like real estate is currently experiencing?

[AKR]

Guys
Ive seen some crazy bids like that over the years and back in Australia I recall the auctioneer refusing to accept a similarly unworldly bid as he thought it was either fake or fraudulent. Not sure what happened after that.

By the way I have drunk quite a lot of 1975s as they were cheap during the 90s in Australia. The Beychevelle was a good wine but not a great one at all. Typical firm tannins of the vintage but without the fruit of say, LLC or Ducru or the best Pessac wines (HB and LMHB excelled in that vintage).

It is weird. I thought that the COVID-19 crisis would reduce auction prices but the opposite has happened and Bordeaux has done well at the auctions I’ve done online over the last year both in Europe and locally.

I remember reading in Broadbent's book that he initially refused to accept sky high bids from Andrew Lloyd Webber when ALW was first getting into collecting. He was concerned that he might welch out, and backup bidders would be aggrieved that their bid had been artificially 'shilled' up.

Broadbent of course quickly pledged allegiance to the money and got over his qualms.

[jckba]

Seems to me like a birth year dragon boat bidding war where the common sense was lost early on.

[Comte Flaneur]

We are in the midst of a speculative mania for many things. Bitcoin is perhaps the most egregious example. I agree with Nouriel Roubini. It will end very badly. The Biden fiscal plan is misguided. Larry Summers is right. We have a big auction here on Wednesday. The last one in November was v strong. I am not expecting to win anything.

Great rant here from Roubini. I agree with him, but he was saying that at $10k. Having said that I don’t understand enough about it so my rule is if you invest in something you don’t understand be prepared to lose everything.

https://www.bloomberg.com/news/videos/2 ... arns-video

[Blanquito]

I just responded to your post on Wineberserkers on this, so I'll replicate here. In general that Sotheby's auction was pretty nuts, made HDH look cheap. What was especially striking to me was how often prices were far in excess of retail on widely available, not-rare, easy to find Bordeaux. E.g. 2009 Lynch Bages for $365/bottle for a case, when individual bottles are widely available on Winesearcher for $200-250 a bottle, 2009 Troplong Mondot $291/bottle for a case, Winesearcher $180-200 per bottle, etc. In older Bordeaux too. 1986 Gruaud for over $400 a bottle when it is $250 or less on Winesearcher, 1985 Ducru Beaucaillou for $365 a bottle when it is widely available on Winesearcher for about $260, etc.

The Beychevelle you quote is amazing but at least that is sort of hard to find and was not otherwise listed on Winesearcher. Maybe there was some weird sentimental value. All those other bottles have many, many Winesearcher listings.

In general it seemed like retail prices were a floor, not a ceiling in that auction. Just get the sense that people were bidding who are so rich that they think of the price of wine as a rounding error. Maybe types like that are waking up to the fact that Bordeaux is underpriced compared to Burgundy for the same quality wines...I always thought a Burgundy-style price runup was impossible in Bordeaux because production volumes are just too high, but we'll see. There has been a major price increase just over the last year.

Possibly wine, like Bitcoin and commodities, is seeing the impact of the huge growth in the money supply over the last year. There is a lot of hidden inflation out there I think.

Yeah, makes me wonder if there’s a money laundering angle to this sort of premium buying...

[Blanquito]

Also, why anyone patronizes placed like HDH and Sotheby’s at high end (so pricey as Marcus details) and Acker and Spectrum at the low end (sketchy provenance) is mystifying to me. Maybe it’s habit, but there are a (admittedly dwindling) few better alternatives which strike the balance between provenance, convenience and price. Brentwood used to fill this niche, but K&L has the best balance in my experience, and there’s enough competition that I usually only win stuff that I really want or that is very much under the radar (which is a good thing).

It is kinda sad how WineBid has deteriorated in the last few years — they never really consistently checked the provenance box, but they were/are super convenient (high res pics, you can buy single bottles, live and real-time bidding, simple and regular auction schedule). But the prices are mostly stupid now, their starting bids levels are pretty high and then you add in mediocre provenance, the buyer’s premium and sales taxes (which they only fairly recently started collecting) and I find very little on their site with competitive prices.

[stefan]

And also WineBid treats customers who spend only 5 figures/year like dirt.

Patrick, I love your guess about money laundering. Drug dealers and other successful business people are always finding creative new ways to launder money.

[marcs]

Also, why anyone patronizes placed like HDH and Sotheby’s at high end (so pricey as Marcus details) and Acker and Spectrum at the low end (sketchy provenance) is mystifying to me. Maybe it’s habit, but there are a (admittedly dwindling) few better alternatives which strike the balance between provenance, convenience and price. Brentwood used to fill this niche, but K&L has the best balance in my experience, and there’s enough competition that I usually only win stuff that I really want or that is very much under the radar (which is a good thing).

Honestly, unless there is a cellar from a named well-known collector I feel like provenance is doubtful, and about equally doubtful, everywhere in the auction world and secondary market. I have bought from auctions for many years now and I would say 90-95% of the time bottles are in excellent outward condition and appear correct on taste. Buyers don't ask for a chain of paper receipts or anything, it's all catch as catch can. I do sometimes get bottles that seem to have been stored at a warmer temperature, I can definitely tell that the condition of some bottles differ from my own purchased-on-futures-stored-since-release bottles, but it's very rare to get one that seems damaged to the point of being unrecognizable or ruined. And this is an issue with ALL backfilling not just auctions -- retail shops buy cellars too. I just count on the fact that there aren't a whole bunch of people out there forging wines, but there *are* a whole bunch of real collectors storing their wines as well as they can.

The price inflation recently is crazy though. I have to think it's related to people seeing their portfolios getting larger and larger while they can't spend money on vacations, restaurants, travel, etc. Do people think this is a temporary bubble we should jump on to thin our cellars, or it's a more permanent development?

[Blanquito]

I do agree of course that, to a degree, provenance on older wines is a crap shoot everywhere. Setting aside the issue of counterfeits, you can get a badly stored bottle from any retailer or auction house, even for bottles which look great by outward appearances. But that said, some auction houses (looking at you Acker) regularly sell wines which were clearly treated horribly across most of their existence, with mid-shoulder ullage, signs of seepage, depressed corks, corroded capsules, labels which look like the bottle spent long stretches under water (Hurricane Katrina? Superstorm Sandy?), etc., while other auction houses seem to have a much higher percentage of off bottles (WineBid) than the best outlets even for bottles which look fine. For whatever reason, I have had by far the best luck (and luck plays a role) with older wines sourced from K&L auctions than anywhere else (I’ve never bid at Sothebys and never won at HDH auctions).

[DavidG]

Cellars from famous collectors do command a premium. Then again, Eric Green and Rudy K were named well-known collectors. Until they weren’t.

I came very late to the auction market, avoiding it due to provenance concerns. Now that I’m of backfilling age I’ve dipped my toes in. High hammer prices don’t bother me. Once the all-in price rises above my cutoff I’m out, so it's a money saver.

[Nicklasss]

I agree that too good prices at auction probably come with more risk.

There is not a lot of auction sales here, but few years ago, one of the great collector in Québec sold i guess one third of his cellar by auction sale. This from a well known collector, with a great cellar, with great aging conditions.

Down the road, i read that it seems that 1 bottle over 4 ( if it is not 1/3) from that cellar are oxydized, or not perfect, or with kind off defect...

Auctions aren't for me i guess.

[AKR]

I just responded to your post on Wineberserkers on this, so I'll replicate here. In general that Sotheby's auction was pretty nuts, made HDH look cheap. What was especially striking to me was how often prices were far in excess of retail on widely available, not-rare, easy to find Bordeaux. E.g. 2009 Lynch Bages for $365/bottle for a case, when individual bottles are widely available on Winesearcher for $200-250 a bottle, 2009 Troplong Mondot $291/bottle for a case, Winesearcher $180-200 per bottle, etc. In older Bordeaux too. 1986 Gruaud for over $400 a bottle when it is $250 or less on Winesearcher, 1985 Ducru Beaucaillou for $365 a bottle when it is widely available on Winesearcher for about $260, etc.

The Beychevelle you quote is amazing but at least that is sort of hard to find and was not otherwise listed on Winesearcher. Maybe there was some weird sentimental value. All those other bottles have many, many Winesearcher listings.

In general it seemed like retail prices were a floor, not a ceiling in that auction. Just get the sense that people were bidding who are so rich that they think of the price of wine as a rounding error. Maybe types like that are waking up to the fact that Bordeaux is underpriced compared to Burgundy for the same quality wines...I always thought a Burgundy-style price runup was impossible in Bordeaux because production volumes are just too high, but we'll see. There has been a major price increase just over the last year.

Possibly wine, like Bitcoin and commodities, is seeing the impact of the huge growth in the money supply over the last year. There is a lot of hidden inflation out there I think.

Yeah, makes me wonder if there’s a money laundering angle to this sort of premium buying...

I'm not sure there is a money laundering angle. In the main, people have to settle their auction buys with credit cards, wire payments, or checks. So it's basically all money that is already in the financial system, thus vetted/AML'd etc.

There perhaps could be a capital control angle: if China (for example) has prohibited residents from removing money from their nation, its possible that their residents could be buying up collector/investor grade wine - settling locally with Zachys/Acker in HK/Shanghai and then keeping purchases abroad. That would be an expensive way for someone to pull money out of the nation if they were subject to capital controls. Argentines pursued complicated versions of this - using exchange listed stocks/ADRs - during all the various chaos of their national cap controls over the years. And perhaps Chinese currency enforcement has shut down the obvious methods (gold, stocks, etc.) so fine wine is the new escape route.

Or the simpler explanation: the world is printing money, in every central bank. And even though wine grows on trees/vines, money is being 'grown' faster. So prices equilibrate!

[Claudius2]

Guys
I have bought quite a lot of wine at auctions over the years, and the first lot I ever bought at auction was 1966 Beychevelle.
I also bought 1970, 1975 and various others since then.

When the recession hit (1990) in Australia, I started buying more (err, actually a LOT more) at action but I quickly learned that you DO need to check them carefully.
Luckily I got to know the auctioneer quite well (Langton's in Sydney) and have had relatively few issues with provenance since then, but I agree, it is a risk if you are not sure where it came from, and outward appearances are not really a guarantee of anything.

I have had better luck here in Singapore though that is when I buy the wines that have come directly from the Netherlands.
The auction house is Winefields and I've not had an off bottle so far (other than the typical occasional corked bottle).

The auctioneers are having something of a field day, and put the interest down to the lockdowns and such.
The point is that as few are eating out and/or shopping on weekends, the auctions are getting more interest.
Despite increased unemployment, it does not seem to have hit the middle and upper middle classes much, if at all.
The usual higher income earners such as bankers and traders here (I mean, oil, commodities, whatever) have in some cases had their bonuses cut, but that is only a small part of the overall economy.

I keep getting emails from Burgundy Report (Bill Nanson) and he keeps showing offer prices for the last handful of vintages, and it is pretty clear that Burgundy prices have escalated over the last 5-6 vintages, and even 2017 reds were generally above the prices of the more regarded 2015 and 2016. Whites are becoming more expensive too, and thus I am moving back to Australia (Margaret River, Yarra, Mornington, Adelaide Hills, etc) for Chardonnay that is both great to taste and fairly priced (at least by comparison).

Last auction I "bought" a case each of 2018 Chambolle Musigny Les Cras 1er Cru and a Chassagne Montrachet Chevenottes, only to find that the seller of the Chassagne decided to keep the wine and complained the price was too low. The hammer price was SGD800 (plus 20% commission). Never seen that happen before, and the auctioneer was a little embarrassed. Hammer price plus commission for the Chambolle was SGD100, or around E62. However, the retail price is now at least SGD200, and with such escalation, I have been eyeing off alternatives to Burgundy. However, most keep disappointing me.

Despite the above, Bordeaux prices remain reasonable if you don't want the trophy wines. I was quite happy to pick up several cases of 2019 EP's which like a few others, had tried hard to not buy.

Overall, I see the auction price jump at least in the less mature Asian markets as being temporary, and there is clear evidence that the Chinese market - which has fuelled demand for the last few decades, has now slowed and some auction stock that would previously have been pushed into HK is showing up in Singapore.

[s*d*r]

Also, why anyone patronizes placed like HDH and Sotheby’s at high end (so pricey as Marcus details) and Acker and Spectrum at the low end (sketchy provenance) is mystifying to me.

If you want back vintages, especially very old, there is no other choice except for occasional retail finds, which are not any more reliable than major auctions in my experience.

I don’t do Spectrum or Acker, so don’t know if they are sketchy, maybe they are.

Strike prices for HDH are notoriously high. I rarely win. For highly competitive rare items, you have to be prepared to go double the estimate or even higher .

K&L auction prices are now high to very high and sniping is routine. Some of the bottles they offer have very low fills or are otherwise out of condition but to their credit they describe them well and of course there are the photos. Their constantly changing shipping regulations are annoying.

It is kinda sad how WineBid has deteriorated in the last few years — they never really consistently checked the provenance box, but they were/are super convenient (high res pics, you can buy single bottles, live and real-time bidding, simple and regular auction schedule). But the prices are mostly stupid now, their starting bids levels are pretty high and then you add in mediocre provenance, the buyer’s premium and sales taxes (which they only fairly recently started collecting) and I find very little on their site with competitive prices.

You have been unlucky, Patrick. Over the last decade I have purchased many dozens of bottles of old Bordeaux from them. Of course a few corked bottles but none obviously cooked. Some have been disappointingly dull, so maybe storage was a problem, I can’t be sure. I really appreciate the high res photos. Maybe the market for the items I am bidding on is different from yours assuming we are not looking for the exact same things.

Prices I am paying on WineBid are fairly consistently the lowest I can find. I will win the lot at opening bid or one bridging interval above it, occasionally two. Sniping until very recently has been rare.

And also WineBid treats customers who spend only 5 figures/year like dirt.

I know you had a bad experience but customer service has improved greatly under the new CEO, Russ Mann.

I don’t want to sound like an apologist for WineBid and I have no connection to the business. I just have not found them inferior or less reliable than other auctions or retail.

I have certainly been burned by bottles I purchased on release and stored myself, especially a long time ago. Probably they were subject to excess heat during the shipping process. There are no guarantees, even I learned for bottles bottled in bond.

Of course it’s still better to age them all yourself if you can and have the patience - and the requisite youth.

Stu

[AKR]

wow normally its the buyers who 'welch' out on purchases, not sellers

[robert goulet]

I buy regularly from winebid and have been very pleased with the process and the customer service...they have even sped up shipping for me a couple times and for the most part I've had some good success with the wines...a recent '76 petit village was amazing... bought for peanuts.

[JimHow]

If I were to sell my cellar, I wonder what is the best option.

[Musigny 151]

I stopped buying from Wine bid after they started charging me for bottles stored during the winter months. I can’t say I purchased a lot, but it was so petty, I gave up. I was encouraged to buy again by the new CEO, and had a far better experience. Now I am not buying because auction prices are ridiculous.

[Blanquito]

If I were to sell my cellar, I wonder what is the best option.

Tom did this, to a degree, not long ago and went with Zachys. Did you shop around for the best arrangement, Tom?

[robert goulet]

Musigny...I believe wine bid allows 6mos storage without charge...wait a minute, your complaining about prices and u have a handle w/ the name of Musigny?

[Blanquito]

Good points, Stu. Most of my issue is I used to get deals, often fantastic deals, regularly at WineBid. Maybe I was spoiled, but those days are long gone and now most of the time I find the all-in prices ridiculously high. And I did have a bad run of ‘dull’ bottles sourced from WineBid.

K&L can be silly high too and often is these days, but their reserve prices are quite attractive so I get the illusion of deals. And occasionally enough, I win! And I’ve done better there with provenance for whatever reason.

And I’m sure to the right clientele, the prices at HDH and Sotheby’s aren’t a bug but a feature to keep the amateurs and riffraff like me away. I just don’t play in that league I suppose.

[Comte Flaneur]

We had quite a big auction today here, the Bacchus auction, nothing really nutso but seemingly quite a lot of irrational or ill-informed bidding which created some volatility.

We had two bottles of Mouton 45 one with the lower ullage undershot and one with the higher ullage overshot quite a bit, but DRC Romanee-Conti 1990 undershot and La Tache and Richebourg 1999s did not meet the estimate.

https://bid.bacchuswineauctions.com/m/v ... 9/?page=30

I had a good day, scooping up Haut-Bailly 2009, La Conseillante 2005 and Pontet-Canet 2000 on the cheap. But I missed out on all my burgundy and Rhone targets.

[marcs]

Some nice prices in that Bacchus auction compared to the U.S. Noticed 2004 La Conseillante going for 700 pounds/case, which if I'm right would be $92 US/bottle after the 12% premium. I've had that wine multiple times and it's a very good wine, a true high-level Pomerol with depth and style. Those are the kind of prices that are disappearing from U.S. auctions -- below-$100/bottle prices for backfilling great wines from unheralded but solid vintages

The fact that they still exist in the UK makes me wonder if some of this is about tariffs.

[Blanquito]

Yeah, I saw some 2000 Pontet Canet go for $162/each all-in recently (I’m not a buyer at the price):
https://m.klwines.com/Auction/BidDetail/1523326

[marcs]

You know Pat, if you just decided to have 2000 bottles instead of like 4000 you could spend twice as much per bottle.

Personally I also wonder if given my limited physical tolerance for alcohol I'd be better off with half the bottles / twice the per-bottle value.

[Blanquito]

Hey, I’m down to 2350 bottles! There are bottles I’d happily spend $162 on, but I’ve never met a P-C I’d spent even $100 on.

I bought a lot of half bottles on future per the same logic, but I’ve found that 375 ml really isn’t a useful size — 500 ml would be better.

[Blanquito]

I loaded up on 95, 96 and 00 P-C not all that long ago, for $65-$85. Those are rational prices.

[Blanquito]

You know, I find it psychologically much easier to enjoy QPR wines than trophy bottles, in part because a trophy wine in my house is usually quite mature or even old, and the hit rate with old bottles is problematic.

I’ve come to accept this and that’s why I have a new found focus on wines less than $50 and new regions (for me) like Beaujolais that are quite inexpensive yet delicious and drink well young. I still chase more expensive wines of course — recently I keep getting outbid on Clape Cornas even at prices north of $150/bottle for newer vintages and I won those 2010 Chevillon NSG based on your enablement, Marcus— but I’ve become much more selective/targeted in the trophy wines I chase.

But I am also lucky that I loaded up on 80’s bordeaux before it got crazy expensive, so I have plenty to tide me over and skip bidding on wines that are double or even triple what I paid for them just a few year ago.

[JCNorthway]

I've pretty much sworn off of auctions because there seem to be fewer and fewer opportunities to get wines for reasonable prices. I am also somewhat leery of provenance on older wines except for a couple of houses who need to maintain their lofty reputations - and their prices are just entertainment for me. Unlike Blanquito, I missed my chance to stock some 80s Bordeaux at reasonable prices. But I think my 1995-2000 purchases will hold be for a decade or so. And by then, if I have not lost my sense of taste, I can just buy inexpensive young wines that don't need a lot of time.