Why do wine collectors lose their economic wits and overpay for wine sold at auction that can be purchased for much less from reputable retailers? They're literally throwing money away.
Possible reasons for overpaying at auctions
- Excellent provenance is worth paying a premium to obtain but how much of a premium? Would you pay 20% more? 100% more? The premium may vary based on how long a period the wine has been "protected" (see an earlier post called The wine authenticity premium).
- The desire to "win" overtakes rationale behavior. Drinking during the auction itself (which can be encouraged) doesn't help maintain clear thinking either.
- You miscalculate the per-bottle price being paid because your bid needs to factor in the quantity of bottles in the lot, fixed bidding increments, and buyer's premiums.
- The stated "uniqueness" of the lot helps you rationalize paying more to get it. Perhaps you're not aware of where else you can buy the same wine from a reputable source. The same people who sell their collections through auction houses often prefer the market pricing, privacy, and speed of selling their collection outright to a retailer or other member of the wine trade.
Example of recent Zachys Stormby celler auction of Yquem
On September 28, 2007, Zachys held its auction of Dr. Nils Stormby's cellar. The catalog documents the provenance of the wine and it's about as good as it gets. Still, the prices paid by collectors were significantly higher than estimates, with the large Yquem section of the sale achieving two to three times its estimates (see Decanter story "Yquem collection goes for US$2m at Zachys Sale").
Yesterday, I received an email from the Antique Wine Company (AWC) in London, pointing out that their enormous selection of 1,372 bottles of Yquem was far more attractively priced in comparison to the prices paid at the Zachys auction (with numerous examples of vintages such as 1916, 1929, 1953, and even 1967 where AWC prices were about half or less). Stephen Williams, the Managing Director of AWC, called me today in response to my inquiry and cited certain examples, such as the 1929 Yquem, where AWC's bottles were more pristine than Zachys' photos and condition descriptions.
Bottom line: Wine collectors should check retail sources in advance of bidding at auction to understand market alternatives and/or tap a more convenient (immediate) purchasing method. If you missed out on any Stormby Yquem lots, it's not too late to get the same wines - just give AWC a call (especially for older vintages) or ask your favorite fine wine retailer. For older vintages, you should also ask about provenance and to see condition photos.
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