Asia to remain most important market, says Sotheby's Wine chief
Region will continue to provide the biggest buyers at auctions, says Sotheby's Wine executive
When Jamie Ritchie joined Sotheby's to start his career as a wine auctioneer a quarter of a century ago, there were relatively few Asian wine customers.
In 2015, Asians are the biggest buyers of wine, both for their parties and for pure investment.
"Asia will continue to be the most important wine-buying market. There are so many Asians who like to enjoy wine but there is no local supply of top-end wine. As such, they will continue to be the biggest buyers in the auction markets in the following years," Ritchie, the chief executive and president of Americas and Asia at Sotheby's Wine, told the South China Morning Post.
Ritchie, a Briton who lives with his wife and two children in New York, visits Hong Kong regularly as the city has become a major wine auction market since 2009. He chatted with the Post at the Hong Kong Convention and Exhibition Centre in Wan Chai where he was preparing for the latest wine auction held in Hong Kong last week.
Ritchie said that in the years since 1990, when he first joined Sotheby's, Hong Kong had always been home to important wine buyers at auction."Back then, China was not yet a market. The only wine auction was held in London, with the buyers mainly Europeans and some Americans and Hongkongers. The buyers at that time were wine lovers who wanted to buy the best wine from auction to drink and there was not yet a concept of buying wine as an investment," he said.
Since then, Asia's burgeoning economies, and the development of a taste for the Western lifestyle in mainland China and other countries in the region, have created a strong demand for fine wine.
People were not just ordering wine to drink but also buying for investment. Those who bought wine at auction could take delivery immediately, then sell later at a higher price. Wine investors can also buy futures products for vintages of Bordeaux, where they will only get the wine two years from now. If the price of the wine increases within those two years, the investor profits.
"Wine collectors are also becoming much younger these days. When I first joined the industry, a typical wine collector used to be 65 years old, but nowadays there are many collectors who are about 40 to 45. The numbers in the younger generation who are interested in wine and food sharing are amazing," said Ritchie.
The explosion of social media might be behind some of these changes, he said, as young people liked to share information about their experiences in wine tasting and their knowledge about wines.
"Technology has played a role in changing the sales and making the wine. In wine auctions, it helps the buyers get the category of wine online quickly while the buyers around the world can submit bids through the internet. It creates a bigger pool [of customers]," Ritchie explained.
"The winemakers also rely on technology to make a better quality of wine at a lower cost. We can buy a US$20 bottle of wine nowadays that is much better-quality than 10 or 20 years ago. Technology is going to continue to affect the winemaking industry."
But the fundamentals of the wine auction have not changed, and the keys to success are still the same. To make sure a wine auction is successful, Ritchie and his team have to determine if a collector's wine is good enough for auction.
"We have to turn down hundreds of requests to sell their wine as we do not feel comfortable with their quality. We may well earn commission by selling these poorer-quality wines but we would not do that. This is because such a practice would only be short-term gain but would bring long-term loss to our reputation," he said.
The major challenge is to find a collector's good wine that can be put up for sale.
"If the collectors are not willing to sell, we have nothing to put to auction. We have to keep good contacts with collectors and vineyards to make sure the supply is there," he said.
"There is an increasing number of people who like to drink wine but the supply is limited. The well-established vineyards in France and Italy have several hundred years of winemaking history but their production is limited," he said. "There are some people trying to make wine in mainland China and other parts of the world but it needs 10 to 15 years to produce the products. As such, prices for the old vintage wines are going to continue to go up."
Ritchie has had some memorable times in his 25 years as an auctioneer. They include the auction of 75,000 bottles of wine from the cellar of Schloss St Emmeram from the collection of von Thurn und Taxis in Regensburg, Bavaria, in 1993.
He was also the auctioneer for the wine collection of composer Andrew Lloyd Webber in London in 1997, which fetched more than US$6 million, and for The Millennium Wine Cellar in New York in 1999, which was the world's highest-grossing wine auction at US$14.4 million.
He decided to join Sotheby's as he wanted to work in the high-end wine market.
"When I was a teenager, my family went to auction to buy all our furniture, paintings, clocks and others to fill in our country house. I was always interested in auctions," he said.
Over the past 25 years, he said wine auctions have been closely linked to the economy and the ups and downs of stock markets. There would be more US and European wine sellers during downturns, as happened during the 2008 financial crisis.
Now that China is the world's second-largest economy and other Asian countries have prospered greatly, people from the region have become the biggest buyers.
"There is an absolute correlation between the economic cycles and the wine auction," he said.
There are also cultural differences, in that Europeans drink wine every night of the week so they need a diverse choice. Americans only drink wine two to three nights a week so they quaff only the best-quality wine.
"Asians are somewhere in between in that they drink about four nights a week so they also want to have a diverse range of wines," he said. "Asians also like to ask a lot of questions about wine as they want to learn more about it. They want to become experts."
Ritchie's father was an insurance broker and his mother an interior decorator. He had wanted to be an actor but ended up in law studies at university. He shifted to wine while working during the holidays in wine bars and restaurants.
"I am a failed barrister who becomes a wine auctioneer to have my show in the live auction room," he said with a laugh.