Sustained volume of demand and stable prices were achieved during the July/August period. Clearance rates however have been stymied for some time by unrealistic vendor expectations. This has been one of the key management issues since Langton's began its internet wine auction service in 2002. In the past 'auctioneer's discretion', was a way of moving stock through the system. Vendors nowadays are able to adjust their reserves online. The benefit is more control to the seller. This obviously establishes certainty, but the impact on clearance rates has been profound. Although the volume of stock coming on to the market is tenfold since 2002, the main challenge is to maintain market momentum. Fresh looking catalogues lead to vibrant sales and good clearance rates. In August Langton's weeded out overexposed lots with the immediate effect of increased market traction and higher clearance rates.
July and August saw plenty of new surpluses coming onto the market. Collectors have seen this stable period as a good opportunity to sell down and consolidate their cellars. The market for rare Australian wines has been assertive for nearly two years as buyers realise the extraordinary depletions of classic vintages. The appearance of 1965 Lindemans Bin 3100 was a surprise. It fetched $1267 a bottle. In 2005 the wine would have achieved around $400. Considering its importance this wine still represents a bargain. It is possibly the most famous wine of the era from the Hunter Valley.
1955 Wynns Michael Coonawarra Hermitage achieved a record price of $3453. The wine was named after David Wynn’s son Michael who died at child-birth. In James Halliday’s The Australian Wine Compendium (Angus & Robertson 1985) he says, “1955 was an historic year. The most exceptional was 1955 Michael, a freak wine which seemingly gained much of its character from the second-hand fortified wine cask in which it was matured.”
Rare bottles of 1961 Seppelt Great Western Sparkling Burgundy ($556)and 1962 Hardy's Reserve Bin C404 Cabernet Sauvignon ($554) also achieved strong prices. 1878 Seppelt Centenary Para Liqueur Port, the first of this historic wine, reached $1667.
Downward drift has been a feature of the Penfolds Grange market. Prices have hovered over the low estimate and clearance rates have slowed down. This is perhaps not surprising after a very successful Penfolds Auction in June. Nonetheless a magnum of 1986 Bin 95 Grange reached $1,956, a near-record price. Penfolds Bin 707 Cabernet Sauvignon is performing above expectations. It is enjoying remarkable demand in China, possibly because it neatly reflects in the glory of Grand Cru Classé Bordeaux. If this trend continues, Bin 707 Cabernet Sauvignon could start moving up towards Grange prices. Over the last three years prices have increased by 60-65%. St Henri is also enjoying good demand. The astonishing prices for rare vintages in 2009 and a rediscovery of the maturation style have resulted in buoyant prices. A bottle of 1961 Penfolds St Henri reached $776, outperforming its more famous stablemate 1971 Grange ($684).
Ultra-fine Australian wine continues to dominate the auction scene. Chris Ringland, Grant Burge, Grosset, Henschke, Lake's Folly, Penfolds, Peter Lehmann Henschke, Wynns are all performing within expectations. The $50 and $150 price range forms the backbone of the secondary wine market.
In August, clearance rates jumped up significantly, largely because of the removal of "dead stock" out of the auction system. Some of the wines have been placed on the exchange and other lots returned to teh vendor. This has had a major impact on catalogue content. It has freed up the auction market and drawn back frustrated buyers. While it is true that some lots with high reserves will sell through, they generally clog up the market like pond weed.
Imported wine continues to attract strong interest. The best performers are Bordeaux First Growths, Domaine de la Romanée Conti and other 'top of genre' classics. Recent highlights include 1982 Chateau Petrus ($5889), 1985 Tenuta San Guido Sassicaia ($1726), 1990 Domaine de la Romanee conti ($6,348), 2005 Chateau Lafite-Rothschild ($2,300 Magnum) and Quinta do Noval Nacional Vintage Port ($1,380).
The overall outlook for the remainder of 2010 is positive. The release of Langton's Classification of Australian Wine V at the end of September and special tastings in Melbourne and Sydney in October will reinforce market perceptions of the Australian ultra fine wine market.
Andrew Caillard
Langton's
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