Wine auctions a bit like gambling

Wine Review| Stephen Quinn

Last week in Hong Kong, Zachys, a US company, auctioned the extraordinary cellar of Joseph Weinstock, a close friend of the famous wine critic Robert Parker. Indeed, Parker tasted bottles from Dr Weinstock's cellar for the first edition of his book on Bordeaux.

The auction comprised almost 700 lots and featured the best Bordeaux vintages from the past half century. Weinstock purchased wines on release and stored them in a custom-built cellar in his Baltimore home. He marked every bottle with a wax pencil with the date, price and source as well as the ullage level.

Ullage refers to the amount of wine lost though evaporation during storage, and typically a wine loses 1-5 cm over several decades. These wines were so well stored, in temperatures averaging 4 C, that ullage losses were minimal.

Many of the buyers for the all-day event came from the Chinese mainland, and cases worth 150,000 yuan ($23,739) went under the hammer in under half a minute. Auctioneers have been known to speak at 350 words a minute and sell two or three lots a minute. The auctioneers worked as a team, like relay runners. The stream of money and words continued non-stop for almost 10 hours. Buyers spent $7.3 million in a Zachys auction in Hong Kong last November.

My notes from the first hour from 10 am show prices were about 10 percent under expected selling prices. By lunch, prices were 15-20 percent higher.

These figures provide a snapshot of the afternoon's highest prices: A magnum of 1976 Romanee Conti Domaine de la Romanee Conti went for HK$75,000 ($9,654) in perhaps 10 seconds. Its expected selling price was HK$60,000. Three 750 ml bottles of Corton Charlemagne Cloche-Dury 1989 sold for HK$70,000 in a few seconds (expected price HK$46,000). A dozen half bottles of d'Yquem 1990 went for HK$24,000 (expected sale HK$16,000) in the blink of an eye.

Chateau Lafite has always been popular in China. For the great 1982 vintage, two groups of 24 half-bottles sold for HK$170,000 per item. Two bottles of the 1953 vintage sold for HK$26,000. Several cases of the 1996 vintage sold for an average of HK$75,000 a case.

Is it possible to find bargains at auctions? Yes, if one knows something about the mindset of people buying wines at auction, and if one is patient and has done lots of research. At this auction most people wanted Bordeaux and Burgundy reds, and these attracted premium prices. I focused on less popular or trendy wines.

For example, I bought 19 bottles of Chateau de Fargues sauternes for $1,029 ($54 a bottle). Some of these wines were made in the mid 1970s and are rare. Over the past few years the average price per bottle of the 1975 Chateau de Fargues sauternes was $149, though it has just peaked and it will be the first I drink.

In his book Sauternes, Stephen Brook wrote "on occasion de Fargues can seem superior to its illustrious one-time stablemate (d'Yquem)". The fruit is hand harvested, sometimes five or more times, picking individual berries until November.

At an auction in 2010 I bought two and a half cases of classic 2005 and 2006 New Zealand reds that retail for $45 a bottle in that country. Michael Cooper's Buyer's Guide to New Zealand Wines rated the wines near the top of a nine-point scale - his equivalent of a high silver medal. Even including freight and buyer's premium these wines cost me $12 a bottle. I drank them with a smile.

But sometimes at the casino one can lose badly. So it is with wine auctions for those who have not done their research. That same year I bought cases of 20-year-old Hunter Valley semillon and 18-year-old chardonnay. Wines like these with pedigree can last for generations, but only if they have been stored well. This wine had not. Because it was an old wine, the auction house would not refund my money.

The wine went down the sink.

With young wines - vintages from the past five to 10 years - some auction houses will refund your money if the wine is tainted. Not so with older wines. The lesson here: Choose younger vintages unless you know the wine has been stored properly.

If you know what you are doing, and can be patient and avoid being caught up in the frenzy, you can find bargains at wine auctions. But it's a bit like gambling: The house usually wins. But when the humble gambler wins, it's time to open a bottle to celebrate.