Fall 2011 Fine Wine Update 10/11

The fine wine market has remained surprisingly resilient in the opening weeks of the new auction season in spite of recent fluctuations in global financial markets. We attended auctions in both Hong Kong and New York and wines continued to sell at a brisk pace with all sales achieving a sell through rate in excess of 95%. Prices do appear to be softening for top Bordeaux, but not as much as many thought they would. Lafite Rothschild has continued to fall off its peaks, but still commands high prices, albeit at the low end of the estimate ranges these days. Latour is now the Chateau to watch as prices have been steadily climbing at a more accellerated rate than the other First Growths.
    Burgundy, on the other hand, shows no signs of decline which can be partly attributed to the continued education of Chinese palates. Domaine de la Romanee Conti prices are higher than ever as an original wooden case of 1990 Romanee Conti broke a record at Acker Merrall & Condit’s Hong Kong sale for $297,179 USD. Other top producers such as Dujac and Mugnier are gaining strength on a near daily basis. At the recent Zachys New York sale, the Dujacs across the board were 20% higher than the Spring auctions. There is a palpable excitement in the air for Burgundy and new records will likely be set at Acker’s November Hong Kong sale featuring wines from the Collection of Don Stott who has arguably the largest private Burgundy cellar in the world. There was a noticeable difference in the auction rooms of New York and Hong Kong where the latter remains more of a spectacle full of energy. Hong Kong is still a bit unpredictable with pricing as evidenced by California wines on offer. Harlan Estate has traditionally been one of the top sellers there while recent sales showed numerous lots passing. Simultaneously, other California wines such as Bond and Peter Michael were consistently selling at the top range of the estimates. The French influenced fine dining scene in Hong Kong also seems to be constantly improving. Meals at L’Atelier de Joel Robuchon – featuring a thrilling bottle of 2000 Bonnes Mares Roumier purchased off the wine list – and  Le Mieux Bistro were some of the best we’ve had yet in the city. While at Robuchon the wine service was flawless, at many restaurants there is still some work to be done which will undoubtedly get better over time.
  The New York auctions seem to be doing extremely well when it comes to “safe” wines such as Bordeaux and Burgundy in the $100 – $300 USD range. People are willing to push up prices for wines they know well and enjoy drinking, but 40+ year old wines are not faring as well. We were able to take advantage of this by purchasing a magnum of the legendary 1926 Cheval Blanc at reserve for $4,000 USD. No one else was willing to take the risk of an older magnum even though from what we saw the color was strong and the fill appropriate for age. It is also interesting to see the psychology at play with the current wine market. While fine wine is certainly a luxury, the price for a few cases of top wine is nominal compared to many other luxury items allowing buyers to feel comfortable as they remain active. For example, $10,000 USD can allow a buyer to obtain a world class case of wine, while that price does not come close to purchasing a fraction of a proper, top level painting. We look forward to following the continued development of the fine wine markets and offering our insights.
Kind Regards,
David Beckwith, Robert Bohr and Ned Benedict

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