At the beginning of 2011, a ripple of excitement permeated the Australian secondary fine wine market. The stratospheric auction prices in Hong Kong for first growth Bordeaux, particularly Chateau Lafite Rothschild, and a resilient interest in ultra-fine Australian wine at home translated into strong bidding and firm prices in the first quarter. For a while it appeared that the negative sentiment of the Global Financial Crisis was finally behind us. However a succession of natural disasters and economic shocks lead to a more cautious pattern of buying and selling.
2nd and 3rd quarter results were weaker than expected, but by no means disastrous. A steady build up of repeat auction stock, as a result of ongoing unrealistic vendor expectations and a softening supply of fresh material impacted on buyer interest and clearance rates. The continuing depletion of older Australian vintages, however, kept prices at record levels. Rare Grange from the 1950s and 1960s kicked back into gear with some very pleasing results. Grand Cru Classe Burgundy, particularly Domaine de la Romanee Conti and many top classified Bordeaux also performed well, echoing the continuing optimism in the auction rooms of Hong Kong, New York and London.
Higher clearance rates, better stock flows and market confidence returned in the 4th quarter. Several impressive private cellars with exceptional parcels of ultra-fine Australian, Bordeaux, Burgundy attracted plenty of buyer interest and stronger price realisations. Although some lesser vintages of Penfolds Grange stumbled during this period, bidding volumes overall remained healthy. 1976 Grange, for instance, achieved a record price of $743/bottle in December. 1990, 1991, 1996 and 1998 vintages saw price gains of around 7% during 2011. While Grange price evolution has not kept pace with First Growth Bordeaux over the last five years, the growing Chinese interest in Penfolds could drive sentiment forward in 2012. The release of 2008 Penfolds Bin 620 Cabernet Shiraz at $1000/ bottle in November 2011, may further prime price realisations of Penfolds experimental wines. The rare 1962 Penfolds Bin 60A Cabernet Shiraz, which achieved a near record price of $3902/ bottle in June, has been steadily creeping up. Penfolds St Henri continued to perform strongly, A magnum of 1996 fetched $236. A rare bottle of 1963 made a record price of $1904/bottle. Penfolds Bin 707 has also made extraordinary gains. During the 4th quarter, prices moved up by as much as 50%. 1991 prices averaged around $288/bottle during this period, compared to $195/bottle in the preceding quarter. Bin 707 has become a star attraction in China. It is difficult to predict how long this will last, although prices are significantly lower than First Growth Bordeaux.
Rare Grange always a very specialised market, made a splash in November, with a pair of Max Schubert-signed 1951 Penfolds Bin 1 Grange Hermitage and 1956 Bin 53 Grange Hermitage fetching $50,784/ bottle and $15 870/ bottle respectively. In December a unique collection of Grange Magnums (1971-2001) also went under the hammer attaining a phenomenal $58,615/set.
Langton’s “Exceptional” and “Outstanding” wines have remained resilient throughout 2011 with many vintages achieving upbeat prices. The market reacted positively to the listing of several new cellars prior to Christmas suggesting a dearth of mature and rare ultra-fine wine in the premium restaurant scene and in private collections. 1991 Rockford Basket Press Shiraz ($186/bottle), 1995 Moss Wood $156/bottle) and 2002 Henschke Mount Edelstone ($147/bottle) illustrate the strength of the market. Henschke Hill of Grace, which has had a longstanding auction relationship with Grange, slowed down during 2011. However volume of demand during the 4th Quarter has increased. 1996 and 1998 have both been tracking at around $460/bottle.
Langton’s inaugural Pinot Noir auction in November brought new buyers into the market and resulted in some great prices, particularly for Langton’s Classified Australian wines. Highlights included Bass Phillip Reserve Pinot Noir 2005 ($277/ bottle) and 2008 Bindi Block 5 Pinot Noir ($126/ bottle).
The rare Australian auction market continues to achieve astounding prices as supply dwindles to extreme shortage. 1973 Moss Wood Cabernet ($1725/bottle), first vintage made, 1955 Wynns Coonawarra Estate Michael Hermitage ($3743) and 1963 Mildara Peppermint Patty Cabernet Sauvignon ($640), a hugely successful show wine, enjoyed very strong results. 1925 Seppelt Para Liqueur Port ($635/ bottle) and 1878 Seppelt Centenary Para Liqueur Port ($1818) were also highlights.
During October, Langton’s achieved an Australian record price for 1982 Chateau Lafite Rothschild ($5751/ bottle). A double magnum of Le Pin fetched $13, 800. Although signs of weakness in the Hong Kong market appeared during November, great vintages still achieved excellent results. 1982 Chateau Petrus ($5819/ bottle) and 1989 Chateau Petrus ($4600/ bottle) also performed strongly. Although market jitters may have dampened the market in early 2011, Chateau Lafite Rothschild was still on the ascendancy leading up to Christmas; a double magnum of 2006 achieved $9787 and a bottle of 2000 attained $2416.
The interest in Domaine de La Romanee Conti has strengthened during the 4th quarter as Chinese collectors increasingly look towards the best of Burgundy. 2005 Domaine de la Romanee Conti Marey Monge Romanee-St-Vivant achieved $2,358/bottle. The legendary 1985 Domaine de la Romanee Conti Romanee Conti fetched $12,650! The supply of these type of wines is ludicrously small. Prices for rare and important Grand Cru Burgundy is likely to move forward in 2012.
We predict a challenging but overall positive wine auction market in 2012. Ultra-fine Australian wines, with strong vintage reputations, should continue to hold or improve in value. Rarities, particularly Australian, will keep escalating in prices. Compared to rare European wines of great interest, these wines are still hugely undervalued. There are more bottles of 1945 Chateau Mouton Rothschild in existence than 1962 Penfolds Bin 60A Cabernet Shiraz or Lindemans Bin 3100 Shiraz. Bordeaux and Burgundy will follow the auction patterns in Hong Kong, New York and London. Already prices for top Bordeaux have fallen, but prices are still substantially higher than five years ago. Nonetheless Grand Cru Classe Bordeaux will still attract solid interest. Grand Cru Burgundy will perform strongly. Grand Marque Champagne and top wines from the Rhone, Italy, Spain etc will continue to attract solid demand. Mid-tiered Australian wine, around $25-50 will offer buyers great opportunity. This market is linked to mainstream retail prices and brand recognition. The high Australian dollar, over supply and a very competitive local market have made it a great time to buy. Ultimately the secondary market is synchronised to fashion, strength of brand, vintage reputation and fame. The very best wines will always find buyers at optimum or premium prices, regardless of which way the economy swings.
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Other Reports
3rd Quarter Market Report 2011
Something's New at Langton's
Back to the Future by Stuart George
4th Quarter Market Report 2010
3rd Quarter Market Report 2010
Heat Affected Cellar Report
Interim 3rd Quarter Market Report
1st Quarter Market Report 2010
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