First Quarter 2003

As we enter 2003 Langton’s online wine market is running at an ‘upbeat tempo’ despite the volatile, under-performing financial markets. Our membership continues to grow at a remarkable rate, with bidding activity up by an average of 28% since the launch of www.langtons.com.au.

The month of March for example saw a record 9061 lots offered, reflecting the increased interest in our new online auctions. Instant access to price and wine information has enhanced member’s buying strategies and resulted in more successful purchases. Even our competitors are using Langton’s information and research for their businesses, especially our wine price data.

Australian Shiraz from the 1998 vintage is ‘hot’; demand and prices are strong and increasing across all fine wine brands, particularly those from the Barossa Valley. The Australian 1999 vintage has yet to inspire the market. As a result there are some good buys around – especially from the Margaret River and Barossa regions which enjoyed excellent vintage conditions.

Penfolds Bin 707, a brand previously struggling, is on the rise again with demand and price strengthening during March. The performance of Penfolds Grange has been steady with prices around the lower end of catalogue estimates. It is expected that the long-awaited 1998 vintage will pull up prices in June. Speculative deals within the wine-broking community (over the last year) are also creating upward price momentum. Grange is a predictable performer providing a low risk for buyers. It may well be a good time to buy Grange, especially from recognized vintages.

Great producers and great vintages from Burgundy are in sizzling form with spectacular hammer prices. The final hour of bidding online is becoming frantic. While our servers can easily manage the increasing traffic, we recommend members take advantage of the AutoBid™ system. AutoBid™ has been created for members and can significantly improve your purchase success rate.

You can easily avoid the last day rush and let Langton's AutoBid™ handle all your bidding for you. Remember AutoBid™ automatically bids only AUD$1 more than the next highest bid. If your AutoBid™ is $AUD60 and the next highest bid is AUD$40 you pay only AUD$41.

AutoBid™ allows you to set the maximum bid you are willing to make, but not necessarily pay, for a lot. Having placed your maximum bid there is no risk of losing a lot to someone else at a price you would have been willing to pay. With AutoBid™ you continue to be involved in the auction without having to constantly monitor the bidding. Apart from the convenience, it is advantageous to place your maximum bid early because the first of equal bids received wins the lot. Using AutoBid™ means there is nothing you need to do on the last day!

March has also seen the introduction of online accounts for vendors. Just like buyers, vendors can now manage all their trading with Langton’s online. No other wine auction house in the world looks after its vendors like Langton’s. Our online vendor accounts have streamlined the flow of communication between Langton’s and its members resulting in our members making more informed selling decisions and boosting overall results.

We are currently seeking more wine stock to feed our hungry online market. Selling rates are competitive and Langton’s results lead the market.

Some Australian wines to watch –

Barossa Valley Estate E & E Black Pepper Shiraz
Bests Thomson Grampians Shiraz
Clonakilla Shiraz Viognier
Katnook Prodigy Shiraz
Leo Buring Leonay Riesling
Penfolds RWT Shiraz
Turkey Flat Shiraz

First quarter highlights (including Buyer’s Premium) –

AUD$80.00 – 1997 Barossa Valley Estate E & E
AUD$75.00 – 1991 Coriole Lloyd Reserve
AUD$177.00 – 1996 Giaconda Chardonnay
AUD$128.00 – 1991 Jasper Hill Emilys Paddock
AUD$85.00 – 1975 Leo Buring Show Reserve Riesling
AUD$148.00 – 1990 Penfolds Bin 707
AUD$240.00 – 1967 Penfolds Bin 868 Sauternes
AUD$251.00 – 1990 Penfolds Bin 920
AUD$253.00 – 1956 McWilliams Mount Pleasant Sauternes
AUD$308.00 – 1990 Mount Mary Quintet
AUD$109.00 – 1990 Parker 1st Growth
AUD$278.00 – 1990 Penfolds Bin 90A
AUD$195.00 – 1996 Rockford SVS Hoffman Shiraz
AUD$455.00 – 1953 Seppelt Great Western Show Sparkling Burgundy
AUD$87.00 – 1996 Ata Rangi Pinot Noir
AUD$111.00 – 1998 Felton Road Block 5 Pinot Noir
AUD$683.00 – 1975 Chateau D'Yquem
AUD$359.00 – 1999 Domaine Leroy Les Beaux Monts Vosne Romanee
AUD$514.00 – 1990 Armand Rousseau Clos St. Jacques Gevry Chambertin
AUD$1857.00 – 1990 Domaine de la Romanee Conti La Tache
AUD$964.00 – 1999 Bernard Dugat Py Vielles Vignes Chambertin
AUD$1025.00 – 1996 Domaine Leroy Richebourg
AUD$569.00 – 1995 Chateau Rayas Reserve Chateauneuf-du-Pape
AUD$310.00 – 1971 J.J.Prum Wehlener Sonnenuhr Riesling-Auslese
AUD$200.00 – 1976 J.J.Prum Wehlener Sonnenuhr Riesling-Auslese

Third Quarter 2003

Overall the market for third and fourth quarters of 2003 has been extremely buoyant with high volume of demand and robust price realisations. Langton’s online wine auctions, which celebrated their first anniversary in October, continue to attract keen interest from both buyers and sellers. During the last two quarters for 2003 Langton’s has offered more than 32,000 lots in just 14 sales with the last sale of the year offering 5000 lots, the largest collection of wine ever to be sold at a single auction into the Australian market.

As always the balance between supply and demand is a critical feature of the wine auction market. The deployment of www.langtons.com.au has allowed buyers and sellers access to an unprecedented level of market intelligence, in particular Langton’s database of prices. While in theory making this information freely available should contribute to a more stable and organized market, some results defy expectation.

The Penfolds Grange Auction held in July coincided with the aftermath of the 1998 Grange release. Penfolds Grange is the cornerstone of the Australian secondary market and is really the only international Australian icon wine (even though some marketers would tell you otherwise). Even from the mid 1960s, Grange could be found in most wine collector’s cellars. Today it is regarded as one of the world’s most important wines, rivalling the great classified growths of Bordeaux and Burgundy.

1998 Grange, when it was released in June, attracted an astonishing level of interest from the media, wine collectors and enthusiasts driving retail and subsequently auction prices to unprecedented price levels. There were reports of the wine being sold at AUD$800 a bottle. However the repatriation of stock by traders from the UK resulted in a stabilisation of prices.

The proliferation of new Australian wine brands in the primary market has yet to impact on the secondary market. Buyers in the secondary market are looking for wines with track record and consequently new wine brands, unless they are endorsed by Robert Parker Jr, do not perform well. Wine brands with a history and a strong reputation from great vintages lead the secondary market.

The more successful ultra-fine wines are performing extremely well with strong volume of demand and price realisations. Wines such as Rockford Basket Press Shiraz and Cullen Cabermet Merlot are classic ultra-fine wines. They represent quality at the highest level, embrace regional provenance in a meaningful way and are known for their consistency of style and longevity in the cellar. The cult wine sector, a subset of the ultra-fine market driven by the influence of the American wine writer Robert Parker Jr. however is performing erratically. Limited production – either actual or perceived – is also important. Interestingly some cult wines, particularly Torbreck Run Rig Shiraz and Greenock Creek Roennfeldt Road Shiraz, have enjoyed a stronger level of demand in recent months.

The Grange phenomenon is unlikely to be repeated, but there are enormous lessons to be learned. For instance Penfolds Grange experienced a market malaise during the euphoric cult wine boom of 2000/2001. As the cult wine market died down Grange won through commanding more interest and respect than ever before. Reputation is a key criterion for success. It applies to other wines too. Grosset Polish Hill Riesling waned for a while but has returned with a vengeance, and Wynns John Riddoch (a wine that was greedily priced out of the market by Southcorp) has found a new enthusiastic following (albeit at more realistic market values). Lake’s Folly Cabernet has also enjoyed something of a revival. If you scrutinize the market you will quickly notice that buyers are interested in good vintages, reputable producers and meaningful regional paradigms like Barossa Shiraz or Coonawarra Cabernet Sauvignon. It is not surprising, therefore, that Langton’s Classification of Australian Wine is considered by the international wine trade as a reliable indicator of Australia’s most reputable wines. Penfolds Grange heads the list – its overall performance has an impact on the whole market.

Some Grange highlights (including Buyer’s Premium and in AUD$)

1 complete set of Penfolds Grange 1951 to 1998 (750ml) – $182,000
1998 Penfolds Grange Magnum (1.5l) – $2,846
1955 Penfolds Grange (750ml) – $4,437
1956 Penfolds Grange (750ml) – $17,631
1957 Penfolds Grange (750ml) – $18,200
1958 Penfolds Grange (750ml) – $15,357
1959 Penfolds Grange (750ml) – $4,894
1960 Penfolds Grange (750ml) – $1,946
1963 Penfolds Grange (750ml) – $1,769

Australian Shiraz still dominates the market generating strong demand resulting in relatively stable prices. Langton’s Australian Shiraz Index, made up of all the leading Australian Shirazes from vintages 1980-1998, demonstrates that Australian Shiraz is a very strong market category.

Wine provenance still continues to be an important issue. While rarity and ‘must-have’ vintages can propel prices beyond expectations, wines not in mint condition can depress potential price realisations. Price results for Grange and Hill of Grace illustrate this point extremely well.