A billboard displays premium wine lots at Sotheby's autumn sales in Hong Kong in October. Photo: SCMP

Hong Kong still tops wine auction sales

Hong Kong is on course to top global sales of fine wine for the second year running, writes Philippe Espinasse

Hong Kong is set to top wine auction sales again this year - a global crown it earned thanks to the reduction of the excise duty to zero in 2008. By the end of last month, the city had held 21 major events, raising a combined US$130.3 million this year. That figure excludes online auctions, and is well ahead of those achieved by rivals New York (US$56.1 million) and London (US$29.3 million).

San Francisco, Los Angeles, Chicago, the Hamptons, Paris, Geneva and Amsterdam have also hosted important - although smaller - wine sales this year. That's in addition to the charity auction for the Hospices de Beaune, a candlelit affair held each November in Burgundy, which this year raised more than US$7.5 million for charity in a sale orchestrated by London-based Christie's. No doubt the glamour of guest auctioneer Carla Bruni-Sarkozy, France's former first lady, helped raise that total.

So far this year two US-based auction houses have raised the most revenue in Hong Kong: Acker Merrall & Condit, at US$39.3 million, closely followed by Zachys. Just behind is Britain's Christie's, with New York-based Sotheby's a more distant fourth. British firm Bonhams also held an auction at Pacific Place last month. The top four are believed to generate some two-thirds of their wine revenues in Hong Kong.

The city has become so attractive as a wine auction centre that chef Ferran Adria has chosen to sell the 8,807 bottle cellar from the now-defunct El Bulli restaurant here and in New York.

(They will be auctioned by Sotheby's on April 3 in Hong Kong and April 26 in New York.)

"Hong Kong remains, by far, the largest fine and rare wine auction market as we end 2012. The reason is it's home to many of the most sophisticated and knowledgeable wine collectors in the world," says John Kapon, Acker's CEO.

Upcoming auctions also include a three-day sale by Acker starting today at Grissini, in the Grand Hyatt. It will feature the first-ever direct auction offer from Gaja, Italy's foremost winemaking family. Domaine de la Romanee-Conti (DRC) will also be available, including assortments of 1996 and 1999 (estimated at up to HK$400,000 for a case of 12), magnums of 1983 and 1985 La Tache (up to HK$80,000), and verticals spanning the 1980 to 2009 vintages.

From Bordeaux, the highlights will include Chateau Haut-Brion, with 55 vintages and Chateau Margaux, with 60 vintages (in both cases, from 1945 to 2009), as well as Chateau d'Yquem, with 47 vintages (1945 to 2007).

A two-day sale by Sotheby's, starting tomorrow, will feature Bordeaux from a European cellar (the top five lots are all Petrus, with up to HK$550,000 estimated for 12 bottles) and Hermitage La Chapelle from the 1949 to 2009 vintages, directly from the cellars of Paul Jaboulet Aine (the top lot there is three bottles of 1961, estimated at up to HK$400,000).

Zachys will also hold an auction at the Mandarin Oriental hotel on January 11.

The biggest auction so far this year was held by Christie's over three days late last month, raising US$13.9 million in aggregate. The top 10 lots on the last day were all wines from DRC, the highest price being reached for 12 bottles of the 1988 vintage, which sold for HK$907,500.

The second-largest auction was an October event held by Sotheby's, bringing in US$9.5 million. Of the top 10 lots, six were grand cru Burgundies - all from DRC.

The very top lots were nine bottles of DRC 1990, sold for HK$1,715,000 (including the buyer's premium), as well as 12 bottles of Chateau Petrus 2000 (HK$441,000).

The shift towards some of the more famous, double-barrelled names of Burgundy is a new development for Chinese buyers, traditionally attracted to first growth Bordeaux, and to a few select names on the right bank, in Pomerol and Saint-Emilion.

At the recent Bonhams auction, some of Bordeaux's best-known labels did fairly well, including 12 bottles of Petrus 1998 for HK$214,200, six bottles of the 1964 (HK$166,600), and a lot of six bottles of Lafite Rothschild 1982 (HK$130,900).

But the real stars of the show were the Burgundy grands crus. These included 12 bottles of DRC 1988, sold for HK$1,047,200, six bottles of the 1995 (HK$511,700), and six of the 1993 vintage (HK$452,200).

With much smaller production volumes than Bordeaux, Burgundies can reach wince-inducing prices.

"We are seeing more and more sales of Burgundies at auction in Hong Kong, as mainland buyers shy away from Bordeaux, which have seen inflated en primeur prices in recent years. The wines they seek, in addition to DRC, are all from the best producers, including Comtes Lafon, Coche-Dury and Armand Rousseau," says Sebastien Chevalier, Hong Kong representative for Sarment, a membership-based wine advisory service set up by sommeliers from top restaurants.

"Burgundy prices, particularly for reds, have been the most important story in the second half of the year," says Acker's Kapon. Chinese buyers are now pursuing Burgundies (and wines from other regions) as more exclusive alternatives to top up their cellars. In August, Louis Ng Chi-sing, a Macau casino executive, bought the 2.3 hectare estate of Chateau de Gevrey-Chambertin, amid much controversy in rural France.

Doug Rumsam, managing director in Hong Kong for merchant and trader Bordeaux Index, says that "2012 has been a year of fascinating discoveries, with new trends: Burgundy, Champagne and Italy".

Many of the lots sold at auction are from large collections, assembled by wealthy amateurs. The issue of provenance remains paramount to establish quality. Fake wines remain widespread, on the mainland in particular, and especially when it comes to the better-known labels.

Distinctive markings, including holograms and ASE barcodes, have now been introduced to deter counterfeiters. Empty bottles of first growths and grands crus are also often destroyed after tasting events to prevent illegal recycling by unscrupulous sommeliers. Much (but not all) of the wines bought at auction in Hong Kong are sold by vendors based in the US, as can be seen from the telltale "strip" or "slip" labels affixed to these bottles, with the name of the local importer, as well as health warnings. Some of these wines can be rather well-travelled, too, which tends to affect their quality.

Wine sold at auction is mostly bought by individuals (some from Hong Kong, but most from the mainland), and a few on-trade outlets. However, many of the world's major wine merchants do not source through auctions.

Bordeaux Index states on its website that it generally does not buy US strip-labelled stock, or wine that has been shipped back into Europe from the Americas or Asia. Similarly, Berry Bros & Rudd, in business since 1698 and still run by the same family, says in its inspection guidelines that bottles with US or non-EU strip labels are to be rejected.

Alongside sales events, online auctions are gaining in popularity. Established in 1996, has 70,000 registered users worldwide who can sell on its platform through a three-step process involving a complimentary appraisal and subsequent consignment, prior to auctions held on a weekly basis. Zachys holds monthly online-only auctions (the next one on December 15) - as does Acker.

Denmark's Bruun Rasmussen offers weekly online sales, featuring wine alongside paintings, works of art and coins. Closer to home, Hong Kong Fine Wine Auction operates an internet marketplace which, at the time of writing, included 719 listings.

"Online auctions are an important part of our business too, and just as global in its nature as is our core auction business," says Kapon.

Philippe Espinasse is the author of (HKU Press) and holds a diploma in wine from the WSET

This article appeared in the South China Morning Post print edition as: Auction stations