Wine column for week of January 14

Wine has become an investment like gold and equities, and the wine auction market in Hong Kong recorded the world’s highest sales again last year.
By the end of last November the city had held 21 major events that were worth US$ 130.3 million in terms of sales. Even though that figure did not include online auctions, it was well ahead of main rivals New York (US$ 56.1 million) and London (US$ 29.3 million).
The city’s three biggest auction houses in terms of revenue were the US-based Acker Merrall & Condit and Zachys, closely followed by Britain’s Christie’s. These accounted for more than three quarters of wine revenues in Hong Kong. Acker Merrall & Condit had US$ 39.3 million in sales. John Kapon, Acker’s CEO, said Hong Kong remained the world’s largest fine and rare wine auction market because many of the world’s most sophisticated and knowledgeable wine collectors lived in the city.
Last year Hong Kong was again the leading sales site for wine at Christie’s, with more than US$37 million in sales. London was next in the Christie’s portfolio with US$ 17 million, followed by New York with US$ 12million.
Simon Tam, head of wine for China at Christie’s, said Bordeaux remained the biggest single subject of wine buyers’ attention, and represented about half of Christie’s sales. But Burgundy was receiving more and more attention, he said, despite the relatively small quantity of wines made.
Christie’s held the city’s biggest auction last year in terms of value. A three-day event in February for the estate of the late Henri Jayer, the famous Burgundy winemaker, raised US$ 13.9 million. These were the wines Jayer had kept in his own cellar for personal consumption.
At the February event some of the prices paid were astounding. Someone paid $US 265,147 (HKD 2,057,000) for a dozen 1985 premier cru Vosne-Romanee Cros Prantoux. This case was expected to sell for about HKD 800,000.
A 1989 vintage of the same wine sold for $US 233,954 (HKD 1,815,000) — well above the expected sale price of HKD 280,000. And a dozen 1979 Richebourg grand cru expected to sell for about HKD 600,000 sold for HKD 1,815,000 or $US233,954. Indeed, 17 lots sold for more than HKD 1 million.
Acker’s Kapon said Burgundy prices, especially for reds, were the most important story in the second half of last year. Rich Chinese buyers were pursuing Burgundies to round out their cellars with more exclusive alternatives to Bordeaux.
Doug Rumsam, managing director in Hong Kong for Bordeaux Index, said last year had been a year of discovery for Chinese buyers. He said the new trends would see people buying wines from Burgundy, Champagne and Italy.
Sebastien Chevalier, Hong Kong representative for Sarment, a wine advisory service set up by sommeliers from Hong Kong’s best restaurants, said mainland buyers steered away from Bordeaux because of inflated en primeur prices in recent years.
En primeur, or “wine futures”, is a method of buying wines early while still in barrel. This offers customers the chance to invest in wine before it is bottled. Payment is made early, a year or 18 months prior to the official release of a vintage.
Buying en primeur means the wines might be considerably cheaper during the en primeur period. But some wines might lose value over time. Wine experts recommend buying en primeur for wines with limited quantities because those wines are less likely to be available when released. Wines most commonly offered en primeur are from Bordeaux and Burgundy.
The quality or “provenance” of wine sold at auction is important, because of the fear of the mainland market’s ability to make quality fakes.
Companies have introduced distinctive markings, including holograms and barcodes, to deter counterfeiters. Restaurants in China now routinely destroy empty bottles of first growth and grand cru wines to prevent illegal recycling by unscrupulous people.
Most of the wine auctioned in Hong Kong by US-based vendors have “strip” or “slip” labels on the bottles, including the name of the local importer.

* Published 19 January 2013. Find a link here.

Categories: Not home, wine

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