Bordeaux Buyers From Asia to Boost $5.7 Million London Auctions

Dec. 7 (Bloomberg) -- Auction houses are hoping to sell fine wine worth 3.4 million pounds ($5.7 million) this week as collectors join the last international sales of 2009.

Sotheby’s and Christie’s International may sell more than half the lots to Asian collectors. The London sales have hundreds of lots of prestige-label Bordeaux reds that appeal to China-based buyers, wine dealers and auctioneers said.

Sotheby’s 840-lot sale on Dec. 9 includes two private collections of wines sourced directly from chateaux such as Lafite, Latour, Petrus and Mouton Rothschild. The event’s 1.8 million-pound upper estimate makes it the U.S.-based company’s most valuable wine sale in London for 2009.

Christie’s expects to make as much as 1.6 million pounds from 540 lots the following day. The first 36 are from the cellars of Chateau Pichon-Lalande, a neighbor of Latour.

“The global wine industry is relying on Asia to consume its best products,” David Elswood, Christie’s international head of wine, said in an interview. Buyers from the Chinese mainland, Hong Kong and Taiwan focus on Bordeaux, said Elswood. “They concentrate on a limited range of brands, and they’re consumers rather than collectors. They’re not buying for long- term investment.”

Fifty-seven percent of all wine sold by value this year at Sotheby’s went to Asian buyers, said the company. It has sold $38.8 million at wine auctions so far in 2009. Last year’s total was $44.6 million, said Sotheby’s. Equivalent figures weren’t available from Christie’s.

Private Cellar

Boosted by Asian bidding, much of it via the Internet, wine auctions at the two auction houses have recently been more than 90 percent sold by volume. In October, Sotheby’s Hong Kong sold every lot of a HK$23.2-million cellar of a U.S. private collector. The Chinese mainland provides 40 percent of the buyers at Hong Kong wine sales, said Sotheby’s.

“I expect between 40 percent and 50 percent of the December sale to go to Asia,” Stephen Mould, Sotheby’s London- based senior director of wine, said in an interview. “In Asia, if you’ve got a bottle of Lafite or Petrus on the table, it’s a sign you’ve made it. Wine has become a fantastic status symbol.”

The monthly Liv-ex 100 Fine Wine Index tracks the price movements of 100 of the most sought-after wines offered in the re-sale market. In its last update on Nov. 30, the index was up 14.7 percent for the year and 12.2 percent higher year-on-year, said Liv-ex.com.

Bounce Back

“Prices dropped as much as 20 percent during the financial crisis,” Mould said. “Since February the market has bounced back to the levels of early 2008. Investors in Europe have been encouraged by the activity in Asia and the strength of Euro.” During the same period, prices in markets such as contemporary art dropped between 30 percent and 50 percent, according to London-based database ArtTactic.

Sotheby’s London auction includes more than 80 lots with bottles of Chateau Lafite, Asia’s favorite Bordeaux. Dates range from 1934 to 2004. A case of 12 bottles of the chateau’s highly rated 1934 vintage is expected to fetch between 5,000 pounds and 6,000 pounds. Three cases of Lafite 2000 are valued at as much as 15,000 pounds each, as are three cases of Chateau Latour ‘82.

“There are various stories about why Lafite is so popular in Asia,” said Mould. “It came top in the original 1855 classification of Bordeaux wines. I also heard at a dinner in Hong Kong that Lafite is popular in China because the name is easy to pronounce.”

Demand from Asia has increased since the Hong Kong government scrapped import duty on wine in February 2008. Prior to February 2007 (when the rate was reduced to 40 percent), the duty had been 80 percent.

‘Headlong Rush’

“Hong Kong has been the hub of fine wine auctions in 2009,” said Elswood after Christie’s achieved a mid-estimate total of HK$40 million at its Nov. 28 sale. The total was 27 percent higher than Christie’s achieved last November. Twenty percent of 376 lots failed to sell, mostly Burgundy domaines little known in Asia. “There have been 30 wine auctions in Hong Kong this year. It’s been such a headlong rush. I expect there to be a slowdown in 2010.”

Christie’s London is offering a mixed case of Richebourg and Vosne-Romanee by Burgundy maker Henri Jayer from the renowned vintage of 1978. It is expected to fetch as much as 65,000 pounds.

The most highly valued of the Bordeaux lots is a group of six bottles of Chateau Lafleur’s 1961 vintage, estimated at 36,000 pounds to 48,000 pounds. Six bottles of Chateau Pichon- Lalande ‘82 -- rated 100/100 by Robert Parker, the wine critic - - have an upper estimate of 3,000 pounds.

(Scott Reyburn writes about the art market for Bloomberg News. Opinions expressed are his own.)