Aficionados and investors spend record sums on fine wines

Bidders at Webb’s Fine Wines and Whiskies auction last week were greeted at the door of the Mt Eden auction house with a glass of Perrier-Jouët champagne. They were offered tastings of 2006 Chateau Magdelaine, Saint-Emilion Grand Cru and Nikka Taketsuru blended malt Japanese whisky – and that was all before things got interesting.

The first lot was a bottle of 1982 Te Mata Estate Coleraine – the first vintage of perhaps New Zealand’s most famous wine. Marcus Atkinson, the head of fine and rare wines for the auction house, had cautiously placed an estimate of $200-300 on it. Bang. It sold under the hammer for $881.25, including buyer’s premium – a new record.

A case of 2008 Stonyridge Vineyard Larose, that had never left the Waiheke Island winery’s temperature-controlled cellars, was estimated to sell for $150-220 a bottle. It more than doubled the upper estimate, selling for $5,640 for the case.

“I have no problem with what people do, once they’ve purchased it … If you want to drink it, drink it. If this wine means money to you, if it means something you really love, you do what you choose with it.”
– Jing Song, Crown Range Cellar

Three bottles of the 2013 Crown Range Cellar ‘Signature Selection’ Pinot Noir by Grant Taylor, which won Best Pinot Noir Trophy at the London International Wine & Spirit Competition in 2015, carried an auctioneer’s estimate of $200 to $400 a bottle. They sold for $2,291 – that’s more than $760 a bottle.

Jing Song, the 35-year-old founder and managing director of Crown Range Cellar, worked with veteran Gibbston Valley winemaker Taylor to choose the grapes and techniques to create what she calls a more feminine wine. “It’s time, finally, for premium, boutique New Zealand wines to be identified as collectable and as masterpieces,” she said.

“I have no problem with what people do, once they’ve purchased it. I used to get very annoyed and question people: why do you buy that if you don’t drink it? Because for me, good wines are made for drinking. But if you own a wine, you do whatever you like. If you want to drink it, drink it. If this wine means money to you, if it means something you really love, you do what you choose with it.”

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Overseas wines fared equally well. The hammer fell on a bottle of 1998 Penfolds Grange for $1,880 (Australia); a 1979 Robert Mondavi Reserve Cabernet for $1,762 (California); a 1998 Massetto Toscana IGT for $1,057 (Italy) – and that was before they got to the French wines. A  bottle of 1959 Petrus went for $5170, and a case of 1998 Chateau Haut-Brion sold for $18,330. It wasn’t just the wines: a 25-year-old bottle of Macallan single malt scotch whisky sold for $5,405.

Last week’s auction set a new record for the highest value per lot sold. And it’s not over yet: Webb’s is in negotiations to sell a bottle of 1978 Domaine de la Romanee-Conti Romanée-Conti Grand Cru that did not go on the night. It carries an eyewatering estimate of up to $30,000. For one bottle of wine.

It’s not just wine and whisky. Received wisdom is that investors turn to tangible assets in times of trouble; classic cars, collectable coins and stamps, art, and wine and whisky – perhaps as their owners look to drown their sorrows.

“We’re seeing a broadening of interest in the fine wine secondary market that is lending support to prices.”
– Nick Martin, Wine Owners

And according to last year’s Knight Frank Luxury Investment Index report, whisky and wine have shown reasonable gains over the past 12 months. 

“We’re seeing a broadening of interest in the fine wine secondary market that is lending support to prices,” said Nick Martin, the UK-based founder of Wine Owners, which compiles the Knight Frank Fine Wines Icons Index.

But, he added, the 2020 growth was unlike that seen following the Lehmann’s crash in 2008. “This is not about a flight to tangible assets,” he said. Investors who were in the equities markets this time a year ago would have seen a much stronger return than wine, especially in tech, healthcare and sustainability sectors.

“Post-Covid, we seem to be getting a lot of people who are spending across the business on tangible assets. So the results of this auction are not surprising to me.”
– Marcus Atkinson, Webb’s Auctions

Closer to home, New Zealand auction houses have been breaking records. Webb’s has had two big classic car auctions over summer, two successful art auctions, and last week, a record-breaking wine and whisky auction.

Marcus Atkinson, the head of fine and rare wines for Webb’s, said the auction market had been going well got the past three years. “But in particular, post-Covid, we seem to be getting a lot of people who are spending across the business on tangible assets. So the results of this auction are not surprising to me.

“I think there is a psychological thing that in this country, we feel like we’re the lucky ones. We dodged a bullet with Covid. So we’re celebrating now!”

Why were the prices paid so much greater than his estimates? “I don’t want to over-hype the estimates, I try to keep them realistic. But when I get blown out of the water, it means next time I’ll put the estimates up.”

“It’s that people want to invest in something tangible, something you can hold onto, when banks are threatening negative interest rates and the property market’s gone crazy. People with money want to put it somewhere where it’s at least going to retain value but, in our case, you can see they’re clearly making money as well.”

Most of the buyers and sellers were New Zealanders, he said, though there were a few from Hong Kong and Singapore.

The Petrus had previously been acquired by a yachtsman while sailing in the US for James H Clark, a leading Miami technology entrepreneur and philanthropist. The yachting crew were invited back to his house for a party to celebrate their win in a regatta. Clark said, you can all go and choose a bottle from my cellar.

“He said he was kicking himself, because the others in the crew chose Domaine de la Romanée-Conti – but he still got a special wine and he got a good payout this week,” Atkinson said.

Since then, the Petrus has been kept in a 13C temperature and humidity-controlled cellar in Wellington – before its auction sale.

One Wellington exporter told how he bid nearly $4000, unsuccessfully, on the bottle of 1959 Petrus. But he had better luck with three bottles of 1983 Chateau Margaux which he bought for $3,172, including buyer’s premium.

The 53-year-old said he had $1 million of wine in his cellar. He also collects carpets from the Caucasus, and art including many big New Zealand names like Bill Hammond, Karl Maughan and Séraphine Pick.

“I buy wine to drink, primarily, and I’ve got a very, very big cellar.” he said. “I have done some six-figure deals which have led to resales, so there is always the possibility of an investment aspect.

“In fact, for a lot of people, they’ll buy a case, sell off 10 bottles and keep two to drink. I’ve done that on a much larger scale. My primary interest is trying to find the oldest possible bottles of wine, in the best possible condition, and drinking them. Sharing them with friends.

“There’s been more than one occasion when I’ve been down to my cellar, and I’ve come back empty-handed because it’s all been either too old, too valuable, too white, too red – and you wind up having a beer!

“By the time you’ve bought bottles, you really need to adopt the prosaic view that they’re really only worth a dollar. You can’t keep thinking about how much you paid for them.”

‘I won’t sell my last bottles’

Jing Song laughs as she recalls her entré into wines. Back then, she was a Dunedin scarfie, drinking wine from cardboard casks with garish, cartoonish branding.

Then, one Easter, she was visiting her mother’s home in Queenstown, and decided they would go visit a vineyard to taste a glass or two of something better. Not knowing the difference between a vineyard and a wine bottling plant, she turned up to the VinPro warehouse in Central Otago – and happened to meet Grant Taylor there.

The two got to know each other over the next few years; he would invite her to help out on his vineyard. Over lunch he would pour their wine from a bottle concealed in a brown paper bag – and together they discovered from these blind tastings that she had an unusually good palate. Together, they founded Crown Range Cellars and she commissioned him to make the pinot noir that won awards around the world.

She then worked with renowned Chateau de Rothschild winemaker Patrick Leon to create a Crown Range Cellar syrah, from Languedoc grapes, that sold at auction for more than four times the auction house’s estimate.

“When there was war in the past, they say wine always survives through the war. And at the worst times, people do invest in something valuable and rare. When there is uncertainty, in the old days people put money into antiques and into property and art and wine. And why not?

“Grant said to me a few years ago, ‘Jing, just look, New Zealand wine is going to be like burgundy’. We had won the international trophy for pinot noir and pinot gris. Once you’ve done that you can’t put an economic value on it. It’s irrational.

“Our Grant Taylor 2013 wine sold out after we won the IWC medal, because we only had 100 cases. I left myself only five bottles. I gave the auction house three bottles because that’s fun, right, to see it sell?

“But it doesn’t matter how much people offer me,  five grand, more, I won’t sell my last bottles. The answer is no.”