Liv-ex Fine Wine Market Blog

Lafite at auction: a taste of what's to come?

Friday’s Lafite Ex-Cellars Auction in Hong Kong amassed a colossal £5.3 million, topping a pre-sale estimate of £1.6 million. But despite the day’s excesses, exuberant bidding continued on Saturday at the Bordeaux Collection from SK Networks Auction, which saw 634 lots sell for £6.3 million in just one-and-a-half hours. Though the sale featured consignments from all of the First Growths, demand for Lafite was preeminent. Vintages sold at around 1.8 times their current market price, albeit at an average of 25% lower than the previous day’s prices.

Although the premium's paid for Lafite at the ex-cellars sale (where vintages came complete with a specially produced back label) can be put down to the auction's exceptional provenance, those prices realised at the SK sale are harder to quantify. Particularly when you consider the results from other recent auctions in the region. The table below shows Lafite vintages that sold at all of the last four auctions held in Hong Kong, alongside their current prices. Whilst October's auctions saw extremely high pricing, it is interesting to note that the two auctions held in September realised prices somewhat closer to the market. 

   
All (hammer) prices are in GBP and are for 12x75cl cases. Prices include buyer's premium.

Lafite 2003, for example, which changed hands at around £12,250 at a Zachys sale in Hong Kong on the 11th of September, fetched £31,130 at the ex-cellars auction on Friday, before descending to £21,400 on Saturday. The chart below (which is taken straight from the pages of Liv-ex Cellar Watch) shows Lafite 2003's auction results against recent Liv-ex trades. As you can see, Friday's sale generated some of the most unpredictable buying to date. 

 
This extreme price volatility makes it difficult to predict the long-term effect that these recent auctions will have on secondary market pricing. Are they an abberation, or a taste of what's to come?

In the short-term at least, the auctions have resulted in increased demand for Lafite on the exchange. The 2009 vintage in particular, which traded at £10,950 on the 26th of October, reached £12,777 per 12x75cl case on Sunday, reflecting a rise of 17%. 

Please log in to view all of the latest auction data on Liv-ex.

For an in-depth look at the fine wine market in the Far East, including an interview with David Elswood of Christie's on the HK auction scene, view the Drinks Business China Report.

Hong Kong buyers bid up a storm

The Sotheby's Lafite Ex-Cellar Auction in Hong Kong has seen furious buying so far, with numerous vintages fetching super-premium prices. On average, vintages 2000-2009 have changed hands at two-and-a-half times the price that the wines last traded at on Liv-ex. The 2009, for example, which is currently offered on the exchange at £11,200 per 12-pack, realised a massive £43,120 at auction (all auction prices quoted are for 12x75cl cases, including buyer's premium), whilst the 2003 was sold at £31,360 (compared to £11,200 on the exchange). Other stunners include the 2000 at £45,000 and the 1982 at £84,300 per case - more than double the wine's market value.

As you can see from the table below (which shows auction prices alongside recent Liv-ex trades), Hong Kong is certainly not the place to buy wine for investment purposes... 

  
All (hammer) prices are for 12x75cl cases and include buyer's premium.

The auction is still in progress at the moment, but check back on Monday for a fuller analysis.

UPDATE

Three bottles of the 1869 have just sold for 1,815,000 HKD (£147,020) each.

The litmus test for Lafite 2008

Lafite's decision to feature the Chinese symbol of luck on all bottles of the 2008 vintage has ignited a frenzy of activity on the exchange, as merchants prepare for a sharp increase in demand from the Far East. Trading kicked off at £8,800 per 12x75cl case yesterday, though intense competition saw prices touch £10,500 this afternoon. The real litmus test, however, will be the Sotheby's autumn sale in Hong Kong this weekend, which is set to auction around 2,000 bottles direct from Lafite's own cellars. 

The ex-cellar catalogue features vintages from 1869 to 2009, including numerous lots from 2008. According to the Sotheby's website, the 2008s are expected to fetch between £4,000 and £5,300 per case, compared to £4,900-£6,500 for the 2006s. In light of this week's announcement, however, it will be interesting to see how much Chinese buyers are really willing to spend on the novel 08 vintage.

The auction will also see dozens of lots from Duhart Milon, Carruades, Evangile and Rieussec go under the hammer, as well as two bottles of Lafite 1870 - each of which is expected to realise £6,500 to £13,000. Other Lafite trophies on offer include the 1949, 1959 and 1982.

In 2008, Asian buyers in Hong Kong bid well above pre-sale estimates for a rare collection of vintages from Latour's cellars. Will this weekend's auction uncork the same enthusiasm?

Lafite prices have continued their rapid ascent in recent months, with the Liv-ex Lafite Index reaching a new high of 674.31 in September - up 3.92% month-on-month. The index, which consists of vintages of both Lafite Rothschild and Carruades de Lafite (2000 to 2006), is currently up 62% year-on-year.

 

Lafite auctioned at premium prices in Hong Kong

On the 10th and 11th of September, Zachys hosted Hong Kong’s fourth largest auction to date. The event generated over £3.7 million in sales (for more than 900 lots) and saw a case of Lafite Rothschild 1982 fetch a spectacular £38,809 (12x75cl). Other top-selling lots included Tache 1999 at £24,511 and Pin 2005 at £22,468. That same weekend, Bonhams held a (smaller) fine wine auction in London, which again saw the eminent Lafite command some of the event’s highest prices, along with Petrus and Mouton Rothschild. But did the wines in London sell at a similar price level to those auctioned in Hong Kong?

The answer, it seems, is yes and no. If we compare the auction prices of wines that were sold in both London and Hong Kong (matching wines by vintage and by unit size), then it appears that those offered in Hong Kong sold at an unremarkable 2.74% premium to those sold in London. If, however, we convert single bottle prices to case prices and include them in the calculation, the premium is significantly higher at 7.93%.

In both cases, Lafite achieved noticeably higher prices in Asia. Whereas a 12-pack of the 2000 vintage sold in London at £17,250, the same case fetched an average of £18,213 in Hong Kong. Auction prices for the 1986 and 1982 vintages reflect the same trend, with buyers in Asia paying considerably more for the same wine.

The table shows the auction prices of a selection of wines that were offered in both Hong Kong and London.

 

Prices up 20% at the Hospices de Beaune auction

It looks like we can expect significant price rises for the 2009 Burgundy vintage, after strong results at the annual Hospices de Beaune auction.

Prices at the charity auction were up 20% on average over 2008, with €5.8 million raised in total – the second highest amount in the auction's 149-year history. In the distant past, prices achieved went a long way to setting the prices for that year's vintage as a whole; in more modern times it is seen more as a guide to general sentiment. The auction consists of barrel lots (around 24 cases each) produced from vineyards owned by the Hospices de Beaune and is run by Christie’s auction house. 

Further details can be found in reports by the Wine Spectator and Decanter.

The interesting history of the hospices, including the original alms building (pictured above, now a museum and hotel) can be found on the charity's home page and wikipedia.

Hospices de Beaune Auction

The amount raised at the Hospices de Beaune wine auction, held on Sunday, was significantly down on last year. The annual charity event sees barrels of Burgundy wines from the most recent vintage auctioned in aid of the Hospices Civils de Beaune, a centuries-old medical charity.

As reported, by Decanter and the Wine Spectator, just over €3 million was raised compared to around €4.3 million last year. The auction consists of barrel lots (around 24 cases each) produced from vineyards owned by the Hospices de Beaune. On average the price for red wine lots fell by 26.4%, with the white lots 2.5% down.

Not everyone was displeased, however,  as the Wine Spectator reports:

"I hope that prices will go down," said Bouchard Père & Fils owner Joseph Henriot, moments before the start of the 148th Hospices de Beaune charity wine auction in Beaune on a gray Sunday afternoon. "I'm not sure that the growers yet understand what's been happening in the financial markets."

In the distant past, prices achieved at the annual auction went a long way to setting the prices for that year's vintage as a whole; in more modern times it is seen more as a guide to general sentiment.

The interesting history of the hospices, including the original alms building (pictured above, now a museum and hotel) can be found on the charity's home page and wikipedia.

Sotheby's on the auction market

Sotheby's auction house (NYC office above) has released its US auction market review for the 2007-2008 season under the headline: 'As demand for high value wines shifts to Asia, supply remains in the United Sates & Europe.'

The report provides interesting reading, although as it only covers the period until Spring 2008 it doesn't take into account the wobbles that hit the market from September onwards. Perhaps the most interesting data provided is that on the increase in demand from Asian buyers, who accounted for 35% of total sales by value this season, compared to 21% last. Somewhat more tellingly, 4 out 5 lots that realised more than $100,000 went to Asia, as opposed  to 2 in 5 in the previous period.

Download the full report

Auctions...again

The massive auction of 2000 Bordeaux wines held in London last week that we highlighted in a previous blog post saw the majority of the wines beat their pre-sale estimates. The full results can be found here, with Decanter's take on the sale available here. Overall the auction totaled more than £1.5 million (including buyer's premium), a notable success for a sale that took place in the midst of the dramatic events that struck the financial markets last week. If we look behind the headlines, however, the wines were sold, in essence, at their market value. As the table below shows, despite busting their high estimates the vast majority of the wines in the sale were sold extremely close to the Liv-ex Current Best List Price (Current BLP, for an explanation of our prices see here). The moral of the story? If you want to know how much a wine is worth, look at Liv-ex.com.

Wine name (all 2000 vintage)	Christie's Price	Christie's Estimate	Current BLP
Latour	9,200	6,000-8,000	8,800
Lafite Rothschild	10,925	7,000-9,000	10,950
Mouton Rothschild	5,750	3,500-4,000	6,000
Mission Haut Brion	5,865	3,500-4,500	6,001
Haut Brion	5,635	3,000-4,000	5,500
Leoville Las Cases	2,415	1,800-2,200	2,495
Montrose	1,150	800-900	1,120
Lynch Bages	1,150	800-1000	1,200
Pichon Lalande	1,438	1,100-1,300	1,440

Yquem vertical sells for £368,000

The 70-vintage vertical of legendary Sauternes Yquem (136 bottles in total) we mentioned earlier in the week sold for £368,000 ($725,000) at a Sotheby's auction in London on Wednesday. The original estimate  for the lot was for £100,000. Apparently it was vigorously contested by two telephone bidders and a bidder in the room, eventually going to a 'European collector'. That comes to around £2,700 a bottle, which shows that exceptional provenance (the wines came for the chateau's own cellars) is extremely beneficial, especially for older wines.

Auction prices moving upwards...

...according to Bloomberg, with prices reached at a recent sale at London's Sotheby's matching or exceeding those paid at a similar sale in January. Sotheby's is holding another interesting auction tomorrow, with the main attraction a 70-vintage verticle of Yquem featuring two bottles of every major vintage from 1892 to 2001 sourced directly from the chateau's cellars. The estimate for this rather special lot is £100,000.