Half Year Wine Market Review

August 10, 2017

Review of 2016 

 

2016 was unique due to the fact that Britain’s secession from the EU neatly sliced the year into distinct halves. In the pre-Brexit part of the year, anything drinkable and in good condition was being sold quickly, so long as it was at a good price. Post-Brexit, after the 10-15% devaluation in the pound, dollar-and-euro-based-consumers began snapping up blue-chip stock, investing in established wineries guaranteed to do well. There was a clear renewal of interest in Bordeaux, not just the top tier châteaux.

 

Total global sales for fine wine clocked in at about $345.9 million, a 2.1% drop from the 2015 total of $338.7 million. Hong Kong experienced a 6.5% decline, dropping their total profits to $92 million. However, the US saw an increase, producing $168 million while also increasing per lot sales from $2,951 to $3,294. Sotheby’s CEO said, “NY sales were pretty vibrant, enabling the city to regain its title as the capital of the wine auction world... It remains the major source of fine and rare wines.”

 

  • Christie’s- Totaled $38.7 million, but saw a 45% drop in London, mainly due to withholding results of the Avery Sale

  • Sotheby's- Came in at $73.7 million, leading the global wine auction, bolstered by the Koch sale.

  • Zachys- experiencing an 18% increase of sales, which can be most likely attributed to single-owner and domaine direct sales, Zachys came up with sales of $65.7 million.

  • HDH- HDH’s sales totaled $47.9 million, once again dominating the domestic auction scene with a 100% sell rate and surpassing its estimated high for the year.

  • Acker Merrall- with their largest market segment being Burgundy, followed quickly by Bordeaux and California wines, Acker Merrall’s sales totaled $58.5 million.

 

2017 Overall

 

For the first half of 2017 (January through June), the total global auction sales for fine wine is about $144.7 million- a 5% increase over the same time period in 2016 (which at this point last year totaled $138 million). The US contribution to this number is $80.6 million (a 4% drop from 2016’s $84 million). Hong Kong, on the other hand, experienced an increase of 32% and came up with $51 million. Finally, London had a decline in sales as well, a 2% drop, and brought in $13.1 million.

 

Sotheby's sale (February 25th) that brought $3.3 million, over the $2.2 million estimate, with 97% of lots sold

 

 

Highlights of the 2nd Quarter

 

April: Liv-Ex shows consistent trading levels with the Bordeaux region accounting for about 67% by value and Burgundy remained at its last marker as well, a high 14%, which is double its historical share. Above its typical value, Champagne came in at about 7%, showing strength in a more diverse market. Top vintages continued to trade high in the marketplace the most action from the 2010, 2009, and 2005 Bordeaux vintages. Spirits are doing very well with an April Sothebys HK sale realizing the highest ever paid for a Whisky lot sold at $989,423, almost twice the high estimate, for a collection of Macallan in Lalique.  Auctions started the quarter strong with $38.3 million in sales and 4 auctions surpassing $5 million in the US and HK.

 

May:  Liv-ex revealed a slight slowdown for Bordeaux trading, accounting for only about 63% of trade value, down from its monthly average of 73.7% in 2016. Burgundy continued to trade well. The auction market continued its strength with approximately $35.5 million in sales with 3 US auctions surpassing $5 million.  Sothebys had a big month with the Don Stott Sale (Part III).  Jamie Ritchie, Worldwide Head of Sotheby’s Wine, remarked: “Basquiat set multiple records in the art world last week and Rousseau, Roumier and Raveneau did the same in the wine world– reaching prices that shocked the wine collecting community. ..”  

 

June: Due to a frost at the end of April, the En Premeur campaign saw initially high spirits dampened by prices creeping upward after lower volume. Bordeaux trading share increased as merchants went to older vintages that translated to an increase of 69%, which is the best trading percentage of the year.  Auction sales stayed strong with roughly $32.6 million and one of the top auctions of the year to date at $7.2 million from Acker.  

 

 

Auction Houses
 

2017 is off to a good start. Clean provenance in wine, single owner sales that have set prices over their estimates and a robust market are all factors contributing to this fine first half of the year. John Kapon, Chairman of Acker Merrall, even stated that, “We are in one of the strongest and most active markets I have experienced in over 20 years!” Here is how some of the most prominent auction houses have performed thus far:

  • Christie’s- Christie’s wine auction sales for the first half of the year have come to total $16.6 million. They partnered with Wally’s on June 22nd, and in their first auction together produced $5.3 million. Within this auction, Champagne and Burgundy did particularly well.

  • Sotheby’s- Sotheby's sales for the first half of the year come out to be about $33.7 million. A $6.5 and $5.3 million HK sale in April were strong with 166% and 199% percent sales to low value showed good strength coming back to the Asian market after a small dip in 2016.

  • Zachys- Zachys auction sales total $24.3 million. On March 9-10th, they had an auction in conjunction with La Paulee de NY and that made the top auction of the year at $7.9 million in sales.

  • HDH- HDH starts out the year with a total of $24.3 million in sales and 100% sell through rate, headlined by the June 23rd sale that brought in $6.1 million.

  • Acker-Merrall- Acker Merrall’s global sales total about $42.2 million (a fifty percent increase compared to the first half of 2016). The April 8th Wolfgang Grunewald auction was 100% sold and made just over $7 million.  Along with a June 10th HK sale making $7.2 million, Acker had 2 of the top 3 worldwide sales.

 

 

Trends for 2017

 

“More than ever we have seen truly a global market, with significant demand coming from every continent and bidding from every available channel- absentee, in room, phone, and online” - Jamie Ritchie, worldwide head of Sotheby’s wine division.


Premium Burgundy has remained strong and continues to lead the way with top producers, and Bordeaux has been climbing through the ranks again with Acker seeing a 76% increase, with a particular emphasis on the more mature vintages. In addition, Italian and Californian wines have shown significant gains as seen with 81% and 46% respective gains at Acker. Champagne’s share of trade is at a high. Danielle Cetani, Zachys’ auction director for Asia, commented: “These phenomenal results in our June 2017 auction shows that the fine market is still going from strength to strength…” The recent HDH auction showed strong demand for Rhone and Spanish wines shattering high estimates, perhaps indicating a continued broadening of the collecting market.  The market showed strong results for the first half of the year with no reason to believe this will slow down, offering many opportunities to enter and exit the market across many regions and price points.

 

Investment Wines of the Year

 

Bordeaux

Château Latour Grand Vin de Château Latour Pauillac Red Bordeaux Blend 2004

4 available | $ 550 | WA 95, WS 95, WE 97 | Drinking Range 2020-2045

 

Château La Mission Haut-Brion Pessac-Léognan Red Bordeaux Blend 2009

1 available | $ 625 | WA 96, WS 96, WE 97, ST 97 | Drinking Range 2016-2030

 

Burgundy