Press article : Wine, a popular liquid asset at auction - Le magazine des enchères par Interencheres

Box of 12 bottles of Château Haut-Brion 1990
Sold 8430€ on August 14, 2020 by Jean-Pierre Besch in Cannes

Pierre Dac used to say "if the truth is in the wine, let it stay there". Truth or not, wine is increasingly occupying the salerooms in recent years, with bottles at all prices, sometimes reasonable, sometimes to make some auctions of modern and contemporary art pale. Sales operators – notably Besch Auction or Arcadia, in the Top 5 wine auction houses in France – have understood that this liquid asset often turns into red gold (or white gold) under the hammer and develop more thematic sales of great wines and rare spirits.This situation is also confirmed by the appetite of amateurs and collectors, more diverse, assertive and with precise tastes. Globally in France, the wine auction sector – in a world wine auction market of around 350 million euros – amounts to 47 million euros with 80000 lots sold every year. It remains rather at small scale, even if compared to last year, a 2% increase was observed according to the latest report of the Voluntary Sales Council. It represents between 3 and 4% of the total auctions in France.

Three bottles of la Tâche 2009, Domaine de la Romanée-Conti. Sold 14880€ on August 14, 2020 by Jean-Pierre Besch in Cannes

Digitalization of wine auctions

In any case, wine - in the same way as a collector’s car or a fine watch - is a refuge value. The evidence with the wine auction excitement during the lockdown due to Covid-19 health crisis. Many sales houses have switched their physical sales online. Thanks to the digitalization of vacations, many collectors found themselves on the Internet to bid from all over the world. This boosts the market with bidders coming mainly from Europe, North America and Asia, with a large share of French and Anglo-Saxons. But the main players in the field remain Asian collectors, from China, Taiwan, Japan or Hong Kong. « The former British colony is, in fact, the world’s leading wine market and a hub of the French grands crus due to the abolition of taxes on wine imports in 2008 », according to the expert Pascal Kuzniewski.

Three bottles of Châteauneuf-du-Pape 2005, Château Rayas. Sold 2230€ on August 14, 2020 by Jean-Pierre Besch in Cannes

Who buys, who sells and why should you go through the auction?

The clientele is very diverse and consists of – whether they are buyers or sellers – 90% of private individuals in addition to restaurant cellars in liquidation. Often sharp and passionate, they want to keep their cellar alive and renew it. It is better to sell your wines than to let them age, oxidize and die. « There will always be buyers, drinkers and connoisseurs. In other words, purists », emphasizes Pascal Kuzniewski. The auction houses are an inexhaustible ground of good deals and surprises to manage your cellar in an epicurean way. They are the only place where the old vintages are, those that are at least twenty years old on the counter. They are second-hand wines. Our goal is not to compete with retailers and wine merchants,” says the expert at Besch Auction. Above all, they are invaluable wines on the first market – like the first Bordeaux wines such as Châteaux Latour, Haut-Brion or Margaux – often up to 60% cheaper than in stores.

Another fundamental fact in this market is the pleasure in buying. The specialists are unanimous on the subject : we must invest out of passion and not in the search for any speculation despite the rating of some great wines that explodes. "You don’t get rich without knowing about wine. The product should be of interest to the buyer, whether he or she is a drinker. I do not believe in a speculative investment in wine. If there is, it will be fun,” warns the specialist. The wine must be an alternative investment of diversification of its patrimony but must not represent more than 5% of it. Moreover, the Autorité des marchés financiers regularly warns investors against investments of this kind. Drink or invest, you have to choose.

One bottle of Calvados 1918 Adrien Camut. Sold 2230€ on August 14, 2020 by Jean-Pierre Besch in Cannes

Regions that please under the hammer

The sales locomotives are the wines of Bordeaux and the Burgundian vineyard and to a lesser extent those of the Rhone Valley. On a vacation, 60% of the lots are made up of Bordeaux, especially the reds, the refuge value of the market and the wines with the highest storage capacity. In the region, buyers want the great wines classified as Top 3 : Petrus, Mouton Rothschild and Lafite Rothschild. Other properties carve out the lion’s share like Haut-Brion, Latour and Margaux. Thus at Cannes on August 14th, six bottles of Petrus 2002 were sold for 13650€, 42 bottles of Haut-Brion 1990 left for 30000€ and six bottles of Mouton Rothschild 2000 - a very popular vintage - were bought for 12050€.

Regarding Burgundy – especially wines from Côte de Nuits – wines of the Domaine de la Romanée-Conti trust the entire market. Lots of 12 bottles in 2009 or 2011 are exchanged between 30000 and 40000€. Besch Auction has dispersed three bottles of La Tâche 2009 for 14880€. The other key signatures of the region? The estates Leflaive, Georges Roumier, Coche-Dury or Jacques-Frédéric Mugnier, to name but a few. Finally, on the third step of the podium, the Rhone Valley and its wines of northern appellations such as Côte-Rôtie, Saint-Joseph or Hermitage, as well as more confidential cuvées of «Nordistes» such as Jamet, Jean-Louis Chave, Guigal or Delas.The star of the region remains the excellent Emmanuel Reynaud with the Château Rayas (Châteauneuf-du-Pape), of which three bottles of 2005 left for more than 2000€ last August in Cannes. Champagne is also very present, especially the rare old vintages of the big houses and their prestige cuvées that age and improve over time. One of the most scrutinized houses is Salon, appreciated for its monocepage and monocru Champagne and produced only in good years (count more than 4000€ for a bottle of the 1950s).

Finally, more and more amateurs and collectors are interested in spirits with an unfortunate phenomenon of speculation on some rare bottles. Spirits affected by this trend? Whiskies, especially those aged, Scottish as Macallan or Japanese as Hibiki and Yamazaki. Also old rums, as well as French spirits like the Calvados signed Drouin or Adrien Camut (count 2200€ for a bottle of 1918), the Cognacs and Armagnacs of the houses Hennessy or Rémy Martin, as well as the Chartreuses whose prices soar.

One bottle of Cognac Richard Hennessy. Sold 2850€ on August 14, 2020 by Jean-Pierre Besch in Cannes

Expertise in this area

Wine expertise is crucial. “This is where you differentiate yourself,” analyses Pascal Kuzniewski. The role of an expert is to be as demanding as possible on the description of the bottles : the condition of the cap, the collar, the capsule, the label and the level of the wine. The aim is to guarantee the authenticity of the wines and to avoid the circulation of fakes. According to the expert, only one criterion on the identity of the wine is crucial for a buyer : the provenance of the wine, that is to say its source, its storage and its life cycle.

Arthur FRYDMAN - September 07, 2020 - Le Magazine des enchères par Interencheres