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Hong Kong wine insiders call Sotheby’s Lafite prices “insane”

Hong Kong and China wine market experts are calling the prices fetched at the recent Sotheby’s Chateau Lafite auction in Hong Kong crazy and not a bellwether of the market.

Merchants, auctioneers and other insiders – many of them assembled for the Hong Kong International Wine & Spirits Fair – have responded to the record-breaking prices paid for Chateau Lafite at a recent Sotheby’s auction in Hong Kong with a mix of amusement and mock horror.

‘I don’t think it’s a reflection of the market, but of the right buyer in the right mood,’ said Doug Rumsam, managing director of Bordeaux Index in Hong Kong.

‘There were probably two mainland Chinese businessmen who had just made their fortunes, competing against each other. This was not a case of 50 people bidding in the room. The prices were insane, nobody expected that – and we probably won’t see it again.’

On the eve of his own Hong Kong auction, John Kapon of Acker Merrall & Condit (which is offering some single bottles of Lafite, including an 1870 – low estimate US$7,500-10,000 – and a jeroboam of 1882 – low estimate US$26,000) also called the prices ‘crazy’.

‘There is a lot of money out here, and a lot of demand for good cellars,’ he said. ‘But even taking that into consideration, those prices were crazy. I am sure bidding for our lots will be lively but we don’t expect them to be like that

The Lafite section of the Sotheby’s sale, which took place at the end of last month, was remarkable for the provenance of the bottles: all came direct from the cellars of the chateau.

Asian bidders paid stratospheric prices: two cases of 2009, which will be bottled next year (estimated at US$10,000-15,000 each), fetched US$68,632. One 2000 case (US$20,000-30,000) fetched $71,751; two more of the same fetched US$62,392 each.

Three bottles of 1869 Lafite Rothschild became the world’s most expensive wine sold at auction, fetching US$233,972 each.

The sale grossed nearly US$8.5m – far beyond the pre-sale high estimate for the entire catalogue, US$ 2,507,944.

Simon Tam, Hong Kong-based wine consultant and educator, said non-Chinese observers would have difficulty understanding the mentality behind such purchases.

‘The biggest difference between the East and the West is that in the West, wine cellar collections seldom get consumed, they are more of a trophy – something to show your friends,’ he said.

‘In the East, everything, regardless of price gets consumed and then replaced.”

Tam notes that while the buyers might appeared to have overpaid, they were simply securing ‘must have’ desirable bottles.

‘The wine industry is too self-important to realise that there is a whole different world or values and desires outside its own suffocatingly traditional boundaries,’ he said.

‘Is this good for the market? The more people who drink Lafite, the more they will discover other great wines in this vast and delicious wine world.’

The view that Lafite overpriced is not universal, however. Nick Pegna, managing director of Berry Bros in Hong Kong, said it was more a case of other wines being ‘underpriced’.

‘To say that 2005 Lafite, which is trading at £13-14,000 a case, is overpriced would be to say that 2005 Mouton, which is £5-6000 a case, is half as good – and this is not true.’

Written by Maggie Rosen in Hong Kong

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