Buying wine at auction

This is a longer version of something I wrote for the Telegraph. It’s actually a bit dry but I want to have all my wine writing in one place hence why I’m posting it. Please ignore if you’re looking for jokes.

Wine auctions have been in the news lately though not for the right reasons. The case of Rudy Kurniawan, an Indonesian wine dealer, rocked the wine establishment. He made millions from selling counterfeit blue chip wines such Le Pin and Domaine de Romanee Conti. He’s just been sentenced to ten years in prison and a documentary abut him was released early this year, Sour Grapes. This shouldn’t put you off buying wine at auction just to be aware that it has the same pitfalls as buying art, antiques and vintage cars with the added one that wine is a perishable product.

Jamie Hutchinson from the Sampler with shops in Islington and South Kensington says ‘only worry about forgeries if you’re buying Domaine de la Romanee Conti, Lafite or somesuch’ More pertinent is how the wine has been stored. Extremes of temperature and bright light will damage wine. ‘A good way to check that it has been properly stored is by looking at the level in the bottle. For example a 30 year old wine such as an 82 Bordeaux, don’t buy if the wine level is below top of the shoulder.’ The auction house should be able to provide this information for you.  He added ‘wines for investment need  to be in sealed cases and stored under bond. You shouldn’t really see the wine you’re buying.’

Jamie added ‘there’s an awful lot of Bordeaux out there and most of it is overpriced.’ Bordeaux has declined dramatically in value, a case of Lafite 2009 cost £15,000 (before tax and duty) in May 2011 is now worth about £6,000, and Jamie thinks ‘it still has further to fall.’’ Burgundy however is made in such small quantities that it is less likely to lose its value. The tiny quantities mean that it doesn’t attract fund money the way Bordeaux did. His tip at auctions is to buy ‘village wines from second tier producers such as JF Mugnier, Denis Bachelet or Jean Grivot.’ These are wines from a named village such as Chambolle-Musigny but not a named vineyard within that village. If you are intent on Bordeaux, ‘buy from an underpriced vintage such as 2004, it’s the same price as 2002 and 2007 but much better and great to drink now.’

Burgundy isn’t the only area that is attracting collectors put off by the volatility of Bordeaux. Italian wines such as Barolo, Barbesco, Brunello and Supertuscans (Sassicaia, Tignaello) are starting to appear at UK auctions. We’re behind the Americans on this. They have been buying Barolo especially since the early 90s. Sergio Eposito of Italian Wine Merchants in New York is quoted as saying: ‘buying into Barolo today may be the best investment opportunity in the wine market.’

Unlike a Ferrari, you cannot restore a Mouton-Rothschild 1945 once it has been damaged.  ‘Whisky in comparison is a safe logical investment. In a sealed bottle it’s virtually indestructible’ Stephen McGinty from McTears auctioneers told me. Ian Buxton author of 100 Whiskies to Try Before You Die told me recently: ‘whisky auctions are very fashionable at the moment, springing up all over the place.’ The market in collectable whiskies divides into two types, those created by the distilleries specifically for collectors, and rare finds. In the former camp is the Macallan 1976 at around $76,000 a bottle. These are whiskies are destined never to be drunk. More interesting to Ian are ‘closed distilleries from places such as old Campbeltown. Something like Dalintober would be a special find. They stopped distilling in the 20s. A rare old malt good provenance could go for five or six figures.’ Again the key word is provenance, ‘Forgeries are a huge problem – Macallan bought a collection from Italy – paid a lot of money, and it turned out to be fake.’

Returning to Jamie Hutchinson from the Sampler: ‘don’t go into an auction without doing lots of research. Taste, learn about wine, read wine writers.’ The days of making quick money from flipping Bordeaux are over but if you do it right you can have both a sound investment and something good to drink.