Wine Auctions

An online wine auction is a good place to find wines that you can't purchased locally. As with all online auctions, online wine auctions can be risky places for the beginner bidder. So - do your homework before you start bidding. Order a sale catalogue well in advance, but don't expect it to arrive much more than a week before the sale. Investigate what you should be paying for the wine you want to buy. Watch out for over pricing or overbidding and be sure to check on the integrity of the seller before you pay. These auctions are serious marketplaces, so act responsibly as a bidder and you may find a whole new world of wine opened up to you.

Wine auction sites are booming on both sides of the Atlantic, fueled by a strong economy and an easing of U.S. laws on liquor sales. New auction houses are rushing into the field, challenging the dominance of market leaders Christie's and Sotheby's. Internet sales should provide further stimulus. ''The market is hot,'' in the fine wine auction category says Christopher Burr, Christie's director of wine sales.

The Chicago Wine Company (TCWC) was founded in May, 1974 by Philip H. Tenenbaum, who is the company's sole owner. TCWC conducted its first fine wine auction in April, 1977, making TCWC only the second company (after Heublein) to conduct wine auctions in the U.S. Today, TCWC conducts at least one live auction and one silent auction per month, which is several times more auctions per year than any other wine auction company in the United States. 

Today's hot market is a far cry from that of only a few years ago. New York State actually used to prohibit liquor auctions, but since the ban was repealed in 1994, New York has become the world's wine-auction capital. As interest in wine auctions soars, competition is driving commissions down. Sotheby's and Christie's, among traditional auctioneers, charge both buyer and seller 10% of the price. But one newcomer - Acer Merrall & Condit, a New York liquor store--charges only the buyer. It is also offering wines that are less rare and lower-priced than those at Sotheby's or Christie's. Says Acker President John Kapon: ''Not everyone can spend 10 grand in an hour.''

Acker recently hooked up with LiveBid.com, an Amazon.com subsidiary, to hold a real-time Internet wine auction. Even though the computer system broke down, $600,000 worth of bottles were sold. Those results forced Sotheby's and Christie's to consider online auctions. Web auction giant eBay, which owns Butterfield & Butterfield in San Francisco, an auction house that handles fine-wine sales, plans to announce an aggressive wine-auction strategy soon. But many states still bar individuals from receiving wine by mail.

Auction Houses generally use a five point method of rating wine:

Quality

Successful wine grape production is grounded upon a thorough understanding of the vineyard site's characteristics. Things that directly affect the quality of the wine include the specific climate of a vineyard and its suitability to the production of the finest wine-producing grapes, along with the skills of the grape grower and winemaker. Quality of both site and labor are the most significant underlying aspects of value. Consistently good performance over time increases value.

Condition

The second most important factor is condition since no matter how good the wine is, it is worthless (although perhaps worthwhile as a conversation piece), if it was not cared for properly. Wine will hold its value throughout the "life-expectancy" if it is kept in constant temperature and humidity in a controlled storage since its release or in a "passive" underground storage providing similar conditions. The best conditions are a constant temperature between 52°-58°F, with 80% humidity, lacking light or vibration. Another important factor is the appearance of the bottles. Bottles kept in original wooden cases or cartons, with good labels, capsules, and fills for age, receive a "full valuation". Also important is the fill level of a bottle. The fill level of a bottle can tell you a great deal about the condition of the contents. The lower the fill level, the more space for oxygen within the bottle which can hasten the ageing process. Fills less than expected for the wine's age (below bottom neck for vintages less than 20 years old; just below top shoulder for vintages 20-40 years old) are usually discounted by 20%-50%.

Ageability

The most valuable wines are those with ageability. While most wines are ready to enjoy as soon as they're available in the market, fine wines will continue to evolve with additional aging. This explains the high prices for top Bordeaux and Montrachet which are the best examples of wines with the longest life expectancy of all chardonnays. Quality of the vintage is a related factor as the best vintages (such as 1990, 1989, 1986, 1982, 1961, and 1959 in Bordeaux) impart power and richness to the wine through high extract and tannins, which evolve over time, adding complexity and more mature flavors. The greatest wines can last over fifty years.

Rarity

These are wines where only a very limited quantity is made.

Chateau Le Pin, which produces only 600 cases annually, attracts unbelievable prices. Chateau Petrus, produces 4,500 cases annually. If you bought 10 cases of Chateau Petrus 1982 for, say, $1,000 per case in 1984 and could sell it at $17,600 per case in 2002, you have made a pretty good profit. Hard-to-obtain "cult" wines are more valuable than larger production wines of similar quality as long as they have been made well-known to collectors. The small production level combined with a great demand determines a wine's status as "cult." Ultimately, these wines are highly sought after, infrequently seen and rarely tasted. The hype and resulting mystique place cult wines in a class of their own, regardless of what their release prices were.

Provenance (origin)

Connoisseurs use a provenance as a guarantee of a work's authenticity. The name reflects the goal of producing wines that are works of art. Wines from a well established and reputable collection will sell for more than the same wines from an anonymous collection.