Have we become a little cautious? Is the strengthening dollar really having an effect on auction sales? Have we missed something? Is it the old cyclical nature of the auction market coming into play, again? Am I being paranoid?
These are the sorts of questions that run through your head when you have completed two auctions for the new year and the indications are that the market has slightly come off the boil after a very energetic finish to 2003. Two major factors have emerged from our last auction and deserve comment.
First is that consumers are definitely opting for what I call, “safe wines, from safe years”, essentially mid range, prominent producers such as Penfolds, Henschke, Lehmann, Barossa Valley Estate, St Hallett and Chapel Hill, solid drinking styles (definitely more red and white) from good to very good vintage years. Can you blame the consumer? I can’t, as this segment of the drinking market now represents both value for money and value in wine quality.
The other factor is that prices have started to ease, bordering on soft. And for this auction house, this means that pricing has been tending towards the lower end of the auction guides. With high clearance rates steady and with a noticeable increase in the number of lots coming in for sale, it does suggest there is more supply for our regular demand, and if my basic economics is correct, this could result in an easing of prices. Then again I did fail eco!
So in summary…consumers are sobering up but there’s good wines to be had in the sub $30 category fetching within guide prices. And for the true bargain hunters, very cheap cleanskin and commercial lots are all selling well.
There were certainly a number of highlights with the W541 auction: $620 for a single bottle of 1993 Three Rivers, $202 for an1981 Krug and $480 for a prized bottle of 1989 Chat d’Yquem. Then there was the $2652 paid for a six pack of 1990 Grange and how about a set of 1980 through 1993 Grange going for $3000 or maybe the $6300 forked out for a case of 1990 Three Rivers. And finally for the dedicated fortified drinker, $845 was the winning bid for the 1880 Seppelt Para Liqueur port.
On a bright note, demand and supply and clearance of Australia’s top drop remains steady, with good sales at prices at the mid to lower end of our price guides. The so called better vintages, 1986, 90, 94 and 96 (used in the Oddbins Good Grange Index) have fallen back a little to pre W539 price guides.
It should also be noted that the famed 1998 Grange finally made it onto the secondary market, and in numbers. But the interesting question for you to consider is: have investors bought this prized item into the auction market too early? For your information we are currently quoting $480-550. Basic advice is, let us wait and see.
Now for those wishing to indulge in imbibing in a little bit of Grange, bargains can still be had in our ”Imperfect Grange” category, as investors are definitely opting for perfection over what can be just minor flaws. And this reflects directly in the pricing for these wines. So if you are thinking of indulging in something that could be quite special, please ask us for our advice before placing your bids.
Also, watch out for the release of the 1999 Grange and the eagerly awaited next issue of Penfolds, The Rewards Of Patience.
Oddbins Good Grange Index…Down 4pts to 104
Even within this amazing category of highly desirable and very hard to find wines, our customers are still opting for safe wines from safe years. Rockford wines are still the strongest performer but the heat has certainly come out of the super-cults from the Torbreck, Three Rivers, Greenock Creek and Wild Duck Creek Estate wineries (to name just a few). But it is interesting to note that while prices paid for these wines may have fallen, they are still fetching handsome returns for the investor.
As highlighted above, this market was and still is driven by overseas consumers. It would be easy then to blame our strengthening dollar and the new bio-terrorism laws in the USA for dampening the 2003 enthusiasm. But I have a feeling that this may be temporary hiccup, as Mr Parker is due for another foray into the Aussie wine industry; and we all know what excitement that causes in the secondary and retail market places. Now , should I hold my breathe?
Surprisingly, this group of now 39 available Jimmy Watson Trophy wines still attracts considerable attention from both consumers and investors. The indications are that values attained for these “notable” wines are generally higher for these Watson winners than the normal vintages.
Good prices are still being paid for wines like the 1996 De Bortoli Yarra Valley cabernet, Peter Lehmann’s 1989 Barossa shiraz in magnum, the 1979 Chateau Yarrinya Yarra Valley cabernet (very rare in fact), 1967 Grange and of course the inaugural winner, the 1961 Stonyfell Metala Langhorne Creek cabernet shiraz.
And who was Jimmy Watson? A Melbourne bar owner and wine identity, who so happened to like 1 year old Australian reds being served at his now famous wine bar. When he passed on, patrons raised enough funds to create a trophy category at the Royal Melbourne Wine Show for, you guessed it, 1 year old Australian reds. A bar, which I remember all too fondly for extraordinary long lunches.
Currently 18 cabernet sauvignons have won it, followed by 13 blends and 10 shiraz. And for the last 5 years surprisingly, cabernet leads shiraz 3 to 2 (see items below)
The bar is still in its original location in Lygon Street, Carlton and is still worth a visit.
Well, the show judges at the Melbourne show might like cabernet and cabernet blends, but we all know consumers are voting with their credit cards for the big, bold and dare I say beautiful Australian shiraz. While there has been a degree of hesitancy from buyers with the cult and super-cult shiraz, as noted above, demand for established mid-range and premium shiraz, particularly from South Australia remains strong. Market leaders are still definitely Grange and Henschke’s Hill Of Grace.
Cabernet is starting to get just too hard, just ask your local retailer! Low clearance levels for high quality wines like Cyril Henschke and the cabernets from Yarra Yering and Wendouree can only add more downward pressures on auction pricing. A little bright spot has been the good sales of Wynns John Riddoch, but given its history of extensive devaluation, it’s not really surprising. This still represents a most excellent bargain wine.
But then again, the old retailer in me suggests that there could now be some good value to be had from a variety made famous by the likes of Chateau Mouton Rothschild, Chateau Latour, Sassicaia, Vega Sicilia, Alma Viva and the unforgettably named Screaming Eagle.
The gods surely blessed us last auction with a super selection of wines from Bordeaux and Burgundy, mainly from the 1990’s but some gems from older, high quality years. For Bordeaux, in particular classed growths, prices are holding their late 2003 levels. Burgundy, unless it is something very special is taking a little more time to clear (but hey, Burgundy drinkers are always so very fussy) and Champagne for Oddbins just keeps bubbling along.
What has been curious for us though, has been the early arrival of the famed 2000 vintage onto the auction scene. This is a controversial year: ex-Bordeaux prices were very high and the initial critical attention was more than favourable, especially from US reviewers, which drove up the prices even further. And on first tasting of these wines, they appear to be quite supple and marvellously approachable. Needless to say, investors heavily bought from what turned out to be an abundant year. It’s a little bit like 1998 Grange, we are just adopting a wait and see attitude to see what develops.
Finally, I am more than pleased to report that the sadly missed fortified consumer has finally come out of the woods and are starting to top up what I think to be their depleted cellars, as we have seen some keen bidding on both the budget tawny end of the market and with the premium vintage/vintage tawny wines.
Maybe from small prices big sales may grow.
Now me lad, take a dose of Bex (isn’t that, that new 17% Barossa shiraz) and have a good lay down. Its not all doom and gloom you know, so I’ll see you with the W542 Report in early may.
Cheers!
Graham Wright
Oddbins Wine Auctions