The Auction Market for Wines

Tips from Lot18's VP of Procurement


For our e-mail newsletter today, we invited Dini Rao to share some tips about the auction market for wines. Dini is Vice President of Procurement for Lot18, a membership-by-invitation website for wine and epicurean products from coveted producers at attractive discounts, which was founded by Snooth's Philip James.

She has worked at as a Senior Wine Buyer, and Wine Specialist, Assistant Vice President, and Charity Auctioneer at Christie's auction house. Dini holds her MBA from the Harvard Business School and her Diploma with Merit from the Wine & Spirits Education Trust. She is now a candidate for the Masters of Wine, which only 26 people in the U.S. hold.

If you don’t know much about the auction market for wines that sold $400 million last year, then you should. For retailers or restaurants, auctions can be a way to diversify and pump energy into your selection (where legal). If you are a winery, it is wise to know what the secondary market does for your brand. And, if like most of us, you just like drinking good juice, auctions still hold a few drinkers’ bargains.

The fundamental question of an auction isn’t whether or not to buy, but at what price. Several factors drive prices at auction.
New buyers
Hong Kong buyers have heated up the market with an interest in Bordeaux in particular. Ten years ago, auction houses would sell UK cellars in New York for higher prices. Now American sellers push for a sale in HK, where last year sales exceeded those in the U.S. with $164 million. Within the U.S., auctions have become more efficient, as more consumers venture to sales rather than just brokers, leaving less room for arbitrage. Entrance by these new buyer groups each created a step change in the market. Investors now wonder: Who will be next or will others exit, creating a void?

Buyers must rely on the expertise of the auction specialist, who inspects labels, corks, the capsule, the glass type and other clues for foul play. While a wine can’t truly be authenticated, buyers are willing to pay higher prices if a bottle comes from a named collector or from the winery directly. To give buyers further confidence, wineries are now investing in invisible inked labels or RFID tags.

Wine comes to auction chiefly through one of four D’s: death, debt, divorce or de-accession. Other than the last, most are not planned sales, yet how a collector stored the wine, where it was purchased and how it will be sold will determine its value. The most incredible collection I have seen was that of tobacco heiress Doris Duke, who stored the wines under refrigeration since the 1930’s and they hadn’t moved since. In these extraordinary circumstances, bottles of 1921 Dom Perignon, 1929 Latour and 1934 Romanee Conti traded at multiples of their previous values. The sample bottles we tasted confirmed these expectations, as the 1921 still opened with a gasp and the '29’s had bright vivacious fruit.

Over time, particularly when packing up West Coast cellars, I found that certain brands were drinking ones -- meaning I was more likely to see "dead soldiers" and hear stories of legendary bottles -- and other brands were equally rated or priced, but often not consumed. This second type is easily found on the auction circuit and undermines the prices of current releases. Why buy a new release at $150 when a well cellared evolving 10-year-old bottle might cost the same? It led me to think that a winery need not only think about the scores a wine produces, but also its basic drinkability and enjoyment factor. When a collector goes into his cellar, does he reach for your wine?

Wine has a finite life, so knowing where a wine is in its life cycle helps one value it. When buying for personal enjoyment, one must also think about where you fall in that cycle. Not everyone enjoys the tertiary dried fruits and funky aromas that develop in the bottle. 


When I first entered the auction business in 2004, you could barely give away Champagne. I bought lots of Dom Perignon rosé and Salon for a song. Then, the NY market for Champagne took off, driven mainly by one collector group and now I don’t even scan the Champagne section of a catalog. Buying “unfashionable” wine such as Loire Valley Chenin, German Rieslings, or Ribera del Duero can mean great bargains. 

Take for example, 1990 Clos de la Bergerie from Nicolas Joly that recently sold at an Acker Auction for $45/btl (including premium), which is the same price one might find a current vintage. If I found this on a restaurant wine list, I would be ecstatic, as it makes for an incredible food-friendly wine.  Similarly mixed lots of odds and ends from a cellar also provide a fun opportunity to craft a dinner party with friends.

While the realm of $40 million Van Gogh works seems a world away, the wine auction market can actually be relevant to watch. At the very least, pre-sale tastings and lavish auction meals can make for a fun departure from the norm.

Mentioned in this article


  • Snooth User: zinfandel1
    Hand of Snooth
    154660 1,084

    An excellent article and very informative. Dini really knows her stuff. I already have an account with Lot 18 and have been very satisfied with their offerings.

    Jan 29, 2011 at 8:40 AM

  • Snooth User: dmcker
    Hand of Snooth
    125836 4,942

    Dini, would be interesting to hear your thoughts on where auction fits in, for the serious collector in any country, vis a vis merchants who buy up old cellars and market through their store front, like Benchmark and BPWine (as just two examples). A survey of the strengths/weaknesses and advantages/disadvantages of various auction houses out there, from Christie's et al. in the UK to HDH et al. in the US, would also be useful. Think something might be possible even while trying to maintain a neutral stance.

    Finally, regarding Snooth editorial policy, I often find I have to read twice to see who's voice is actually speaking in certain articles. Where does Snooth's editorial voice end and Dini's begin? Where does Greg's begin and end, especially in Dedicated articles. And in, for example, why are there no bylines but lots of first-person statements? Some formatting, and other, tweaks would help out here.

    Jan 30, 2011 at 9:56 AM

  • Snooth User: dinivino
    Hand of Snooth
    42235 35

    Thanks zinfandel1!

    dmcker: those merchants certainly have the advantage of providing the wines more immediately, but have a pretty limited selection at any given time. Their wines are market priced, so your chances of finding something undervalued isn't so great.

    As for the auction houses, one is only as good as its last sale and I find the great collections scattered between the houses. Make friends at the tastings with a specialist at a couple houses and have them tip you off when things of interest come to market.

    I will pass along the word re: bylines.

    Feb 05, 2011 at 6:59 PM

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