Why buy wine at auction? Primarily because the breadth of fine and rare wines on offer far exceeds the typical stock available at retail.
In addition, auction prices generally fall below retail levels and occasionally even below wholesale. Sound intriguing?
We’ve compiled a guide to help you navigate the auction world:
Know What You Want
Before you attend an auction, determine your objectives. Are you filling in gaps in a pre-existing collection? Are you looking to increase your cellar inventory? Are you buying for investment’s sake? In the absence of a concrete plan, you may get sidetracked.
Study the Catalogue
Auction houses offer catalogues of their upcoming sales. “Read the catalogue’s condition reports carefully,” suggests Bina Genovese, joint managing director of Strauss & Co Auctions, and auction specialist.
Wines kept in professional or home temperature and humidity-controlled storage are preferable to collections housed in natural or “passive” cellars, because the latter are often subject to temperature fluctuations, which can affect wines adversely. Study the ullage levels, as the air space between the cork and the liquid is a barometer of a wine’s health.
Know What It’s Worth
Smart wine collectors cross-reference retail prices with previously realised auction prices and estimates. Go in with a game plan. “Every auction has hundreds of lots, from all over the world and at a variety of different price points,” adds Genovese.
Don’t Expect a Bargain Much Below the Estimate
Understand that auction estimates are a guideline, not a guarantee. They are usually based on previous hammer prices.
“Our Strauss & Co catalogues entries stipulate a lower and higher estimate, and a reserve price decided by experts, based on precedence achieved at previous auctions, provenance and the condition of the wine,” says Genovese.
Calculate the Hidden Costs
Remember to factor in the supplementary charges that will be added to the final cost of your purchase as stated in the catalogue. “In addition to delivery and insurance being charged to the buyer’s account, first-time buyers need to pay a buyer’s premium of R5000 plus 12% VAT charged on the premium”.
Consider a Dry Run
The best way for a first-time auction goer to get the hang of the live auction process is to attend a sale with no intention of bidding.
How to Bid
All practiced auction-goers have their personal bidding style. Some simply raise their paddle at the outset of a lot and lower it only when they have secured the item or when the bidding exceeds their spending limit. One effective tactic for high-priced wines is to enter the fray at the last minute, when the high bidder thinks he has secured the prize.
Set A Limit for Yourself
“As much as I’d love to tell you to just bid on everything, the reality is you’ll have more fun if you stick to a price range by practising self-control,” says Genovese. You want to end up happy with your purchases and not feeling buyer’s remorse.