What makes a wine valuable at auction?

The Buyer

A wine only has a real value to the person or persons intending to open and drink it. They will typically value the wine according to the experience they have had in the past or a perception and expectation of the wine that has formulated in their mind and only the buyer knows how much he is willing to pay for it.

The Vintage

It is a common misconception that a wine gains in value over time. A wine will mature, peak and inevitably die. Some wines will remain drinkable much longer than others. However, some vintages are better quality than others and the better the vintage the more valuable the wine.

Sales History and Brand Reputation

We set a value for a wine based on its past sales performance.

Any wine or winery that is known to be of quality and drinking well, either through initial reviews in the media or follow up reviews and hearsay from social sources will experience a premium to market value and over time this information can be seen in the signals given from sales results.

Essentially, a more sought after wine becomes more valuable as demand for it increases and the price may fluctuate on each occasion it is placed on the market.

How is a wine priced that has no auction sales history?

A wine has an intrinsic value based on its saleability. As a guideline a wine with no known sales history, supporters or advocates at auction is valued on the last known, lowest retail price less 40%. Each auction that it has no buying support will lower its offering price until it is sold.

Availability

A wine that is highly sought after that has only been produced in a small quantity will ramp up in value over a short period of time. Obviously as the wine is consumed the available quantity decreases and, if it is drinking well, it becomes even more desirable and the price spirals upward.

Factors affecting the auction value of a bottle of wine

Condition

The condition of a bottle can indicate a number of signals to a would-be buyer about any risk involved when buying the wine. Low levels and signs or any evidence of weeping will signal that there may be significant risk involved and prices will be adjusted accordingly.

Provenance

The purchase and storage history of a wine is a very important factor for the buyer when determining how much they are willing to pay. A wine that has been purchased direct from the winery or on release from a retail outlet and then stored under appropriate conditions over its lifetime will give greater confidence to the buyer than one that has an unknown history. An explanation of provenance grading at auction.

Timing

On most occasions there is a steady stream of both buyers and sellers in the market. Ideal conditions suggest that there is a buyer for each bottle on offer. However, in the real world many socio-economic, geographic factors and the time of year will directly affect the number of people selling, the number of people buying and the demand for any one bottle of wine. The seller would prefer more buyers bidding on their wine and the buyer would prefer to make sneaky purchases without anybody else knowing what they are interested in hence minimal competition.

The seller’s reasons

Whilst each wine can be valued by an auctioneer based on past sales and the other factors mentioned above, occasionally the offering price will vary depending on the conditions of the seller (which are generally unknown to the buyer at the time but can sometimes be determined by the “actual” opening price or reserve if divulged). Sellers may influence the price by offering lower reserves to encourage a fast sale but rarely inhibit sales by asking more than the market is prepared to pay as the auctioneer will not accept an agreement if he is not confident that it can be sold at a higher price.

Where can I sell my wine?

Because you need a license to sell alcohol you cannot legally sell privately on places like eBay or Gumtree. Your choices are limited to licensed businesses who sell on your behalf and specialist wine auction houses offer the most convenient access to a large marketplace of regular buyers of fine and rare wines.

Practical steps for selling wine at auction.

Pricing Indexes for the top Australian auction wines

If you cannot find the wine you are looking for in the list above you can search our comprehensive database of past Australian wine auction sales for thousands of wines.

Author: Mark Wickman
wineauction@wickman.net.au
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