Auction madness, futures nonsense
Big auction houses, spearheaded by Zachys, have been pushing prices to nonsensical levels.
Their last NYC catalog ("The Fall Auction") even advertises a $1000 BYOB dinner (yeah, $500 tax deductible, but c'mon, still 500 a head for a BYOB???) for Nov. 30th.
Not to speak of actual hammer prices for the wines themselves. Just to quote a classic: a 1982 Mouton Rothschild has gone from the mid $400s to close to $1000 since 2003, that's about 50% per year for the last 3 years. So ridiculous are these prices, that most buyers nowadays are not even wine colectors, just speculators hoping to make a quick buck reselling next year the stuff they are buying today. And then you have all the schmocks out there paying $600+ for a 2005 bordeaux future they'll put their hands on 2 years down the road, with the expectation it'll sell for a profit.
For God's sake, gimme a break!
Try wines from the Rhone, Alsace, Loire and Provence. Just as good but without the huge price inflation. Yet.
Bordeaux and Burgundy get the high prices because many people, including people with money from Asia and the Middle East, have empty cellars and deep pocketbooks. It's the free market at work.
My opinion: this is free market at work in the same sense that the savings and loans of the 80s, the dot coms of the 90s and the Enrons of the 2000s were free market at work too. In other words, too much idle clueless money floating around, and a few clever guys making it big time.
The top Rhones have inflated a lot. Vieux Telegraph has gone from under $20 a bottle to around $60.
I stayed away from the 2005’s en primeur due to the unjustified obscene pricing (as much as I blame the speculators, I also blame the middle men, but NOT the collectors from Asia and the Middle East– they’re just collectors who happened to have very deep pockets).
In terms of price and quality, I’m happy with my last participation in the Bordeaux futures market, the 2003’s - it’s a slightly different style, with the ripe stuff, but it’s turning out to be a very good different style for most of the classified producers that I’ve sampled so far. I’m also starting to find available excellent valued bottles from the non-hyped 2001 and 2002 vintages. I’ve stocked up on these classical-styled years and, more and more, these purchases are looking to be such good values when compared with the 2005’s pricing. Plus, now I’ve spent more efforts in sourcing and have been able to slightly augment my stash with some good priced 2000s that I missed out on during the first tranches.
I don’t think I’ll regret missing out on the 2005’s, especially as I think that it merely made me slightly smarter in my buying strategy.
BTW, I’m a drinker and an enthusiast. I am not an investor.
I agree. Have avoided the 2005 futures madness. DUDE. Craziness. I'm sure the wines will be great, but still. This officially ridiculous. And we thought the 2000s were bad.
RicRios, I couldn't agree with you more. Five years ago, my wine buying was 80% auction/20% wine merchants. I bought from Acker Merrall, as well as several other wine auctions. It was not difficult to score some really fine wines with lowball bids.
Now, my wine buying is 2% auction/80% direct purchase from vineyards (thank you, Supreme Court) and 18% wine merchants. I receive 20 catalogs a year from wine auctions.
They don't even waste their time with sub-$50 a bottle lots. Rare to be able to buy second growth Bordeaux or CDPs, for example, for less that $50 a bottle. My cellar has many bottles purchased from auctions five or more years ago for a fraction of their current cost. Now they are ready to be drunk. Like real estate, rare coins and other collectibles, wine has become an object of speculation. There are hundreds of small producers, some of them stellar and some of them stars of tomorrow, that will direct ship to you. Read any wine publication for their names, then find them on the web or call them, join their buying clubs and start enjoying. Perhaps I will put together a list of those vineyards I currently buy from, along with their web addresses and wine club prices.