INVESTING - 4 MIN READ
The Ultimate Guide To Wine Auctions (2020)
Want to buy and sell wine at wine auctions?
Wine auctions are a great way to trade rare wines from Bordeaux, Burgundy, Napa Valley, and other wine regions.
But, which are the auction houses that host the best wine auctions?
And, if you’re looking at wine as an investment, are auctions the best way to approach it?
Here’s a handy guide on everything you need to know about wine auctions to help you out with those questions. We’ll also highlight a better way for you to invest in fine wine!
This article contains:
(Click on the links below to jump to a specific section)
- What are Wine Auctions?
- Top Three Wine Auction Houses.
- Dos and Don’ts of Online Wine Auctions.
- A Simpler Alternative: Investing in Wine Bottles through Vinovest.
Let’s get started.
What are Wine Auctions?
Wine auctions are events for bidding and possibly winning some of the rarest and finest bottles of wine. The highest bidders could get hold of a some of the best wines the world has ever seen such as:
- A Domaine de la Romanee-Conti bottle
- A La Tache
- A rare vintage of Domaine Dujac from Burgundy
- A Chateau Latour from Bordeaux
- A Kistler chardonnay from Sonoma
- A Screaming Eagle Napa Valley Cabernet Sauvignon
- The list goes on!
To understand how auctions work, let’s look at the different kinds of wine auctions.
Types of Wine Auctions and How They Work
There are three types of auctions that deal with wine:
1. First-Hand Wine Auctions:
These are live auctions held by a winery or wine company. They’re usually held as charity auctions, for product promotions, or just to gauge the market response to new products.
2. Second-Hand Wine Auctions:
This is the domain of auction houses like Sotheby’s New York and Christie’s where you can find vintage and investment-grade wines. It could be a live auction or a silent auction where bids are simply written on paper and placed next to the item.
3. Online Wine Auctions:
Here, a sale is broadcasted virtually and a bid can be accepted online, allowing you to participate from anywhere in the globe.
So, which are the wine auction houses that need to be on your radar?
Top 3 Wine Auction Houses
Most of the best wine auctions are hosted by these three international auction houses.
(Some of them even offer wine advisory services along with visits to a vineyard and wine tasting rooms, and socializing events like the occasional wine dinner for guests as well!)
1. Sotheby’s Wine
Sotheby’s Wine is a wholly owned subsidiary of Sotheby’s Inc. that holds over 20 wine auctions (live or online-only) each year in London, New York, and Hong Kong. The sought-after Bordeaux First Growths like Chateau Lafite and Burgundy Grand Cru Pinot Noirs like Domaine de la Romanee-Conti are auctioned here along with the rarest vintage wines from Bordeaux, Champagne, Napa Valley, and Sonoma County!
Christie’s Wine & Spirits department organizes live auctions across Europe, the US and Asia, and online sales all year round. Its auction catalogs feature a selection of great wines ranging from Bordeaux blends and Burgundy Pinot Noir, to Napa Valley Cabernet Sauvignon.
3. Acker Merrall & Condit
Established in 1820, Acker Merrall & Condit holds over 15 live auctions each year, and tons of online auctions every month. You could get your hands on a rare Petrus from Bordeaux, or a Dujac Echezeaux Pinot Noir from Burgundy.
However those aren’t the only great auction houses!
Besides these, companies like WineBid, Spectrum Wine Auctions, and retailers like Zachys and K&L also host great auctions for wine enthusiasts.
You could even try charity auctions like the Naples Winter Wine Festival and Auction Napa Valley.
Selling and buying wine through auctions isn't as easy or enjoyable as sipping on a glass of Pinot Noir. You’ll need some of these insider tips to sail smoothly though all kinds of auctions:
Dos and Don’ts of Online Wine Auctions
Keep these pointers in mind when you participate in any wine and spirits auction.
1. Know what you want:
Be clear of your requirements. Note down the wine regions you’re interested in, your budget, and whether you want to just increase your wine cellar inventory or actually invest in wine.
2. Find the total costs:
The final price will include a buyer’s premium, sales tax, shipping, and insurance.
3. Get clarity on provenance and bottle condition:
Make sure the auction house has traced the provenance of the bottle of wine. Go through the bottle description, and don’t buy it unless it’s in perfect condition.
4. Research on prices:
Do a thorough research on retail sale prices and previous online and live auction prices of the auction items.
5. Know when to bid and sell:
You should be up-to-date about the auction market and vintage performance trends to know exactly when to bid and sell. Insider news, commentary from wine critics like Robert Parker, and sources like the Wine Spectator magazine can help you with this.
The bottom line
The truth is - if you’re a serious wine investor, and want to manage an entire portfolio of investment-grade wines, auctions might not be a great option.
Here are more challenges you’d face:
- You’ll need to pay a fairly high buyers and sellers premium to auction houses. For e.g., Sotheby’s charges upto 25% buyer's premium and a 10% seller's commission on the hammer price of each lot.
- Auction house prices and commission aren't always transparent. For instance, sellers commission can vary greatly - a seller with a large portfolio may sometimes be offered zero commission, and it would be added on elsewhere, even to the buyers commission.
- The process is time consuming. As a buyer you need to study the lots in the catalog, and maybe attend the auction in person. One you win the bid, It may be several weeks before you receive your wines - you’ll get an invoice, and the payment has to be processed before any shipping is arranged.
- Most of the newer online auction platforms sell their lots through third parties. This means you are solely relying on the seller’s word, and it’s hard to know whether the bottle they sold comes with an impeccable provenance or not.
- The fact that you have to deal with storing the bottles yourself is complicated, especially to first-time collectors. You will need to set up a storage facility with the right temperature, humidity, light and vibration conditions. Additionally, you’ll have to bear tons of insurance and maintenance costs!
So what can you do instead?
Work with a wine investment platform like Vinovest that will let you buy, store, and sell wines without you having to ship them physically!
Let’s see how that works.
A Better Alternative: Investing in Wine Bottles through Vinovest
Vinovest is a wine investment company that lets you invest in bottles of investment-grade wines from anywhere in the world.
Here’s how Vinovest makes wine investment a piece of cake!
How it Works
It’s as simple as this - you need to:
- Sign up on the Vinovest website as a wine investor.
- Fill up a questionnaire on your risk tolerance and investment horizon.
- Take a look at your wine investment portfolio.
- Fund your investor account.
You can then sit back and simply track your portfolio in real-time.
Benefits of Investing through Vinovest
Vinovest takes care of your wine investment process from end to end: research, authentication, buying, storage, insuring, and sale of your wines.
Here’s what they offer:
1. Best Prices:
You can buy wines at the best wholesale prices that are sourced directly from winemakers, global wine exchanges, and merchants.
2. Optimal Storage:
Rest assured, your wine cases will be safely stored in bonded warehouses where humidity, temperature, air quality, light, and vibration are maintained at optimal levels.
3. Tax Advantages:
The bonded warehouse facilities charge no excise duty and VAT. Vinovest passes on these gains to you.
4. Low Fees:
You only need to pay a 2.85% annual fee (2.5% for an investment portfolio above $50,000), which covers wine buying, fraud detection, wine storage, insurance, portfolio management, and selling.
5. Full Insurance:
It includes a full insurance policy at market value.
6. Curated Portfolio:
Get a curated portfolio of investment-grade wines from across the world.
7. Easy Buying and Selling:
You can buy wines at any time. You can also sell to counter party buyers whenever you wish to, and get the wines delivered to them.
Way simpler than navigating the world of auctions, isn’t it?
Wine auctions are a good platform to get hold of collectible wines and to sell them at mind-boggling prices.
But, it is a complex affair if you’re looking at investing in and storing wine for the long term.
Vinovest offers you a much better way to build and manage your portfolio of wines and then sell them at the best prices.
Sign up today and invest in some of the finest, investment-grade wines in the world - all while sitting at home and sipping on a glass of Sauvignon Blanc!