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Chicago Auction Market Heats Up With Arrival Of Acker Merrall & Condit

November 30, 2011

The Chicago wine auction scene just got a lot more competitive with the late October arrival of Acker Merrall & Condit, which promises to compete closely with incumbent leader, Hart Davis Hart Wine Co. Thus far, Hart Davis appears to be maintaining its advantage in the Midwest, though by a slim margin.

Acker Merrall entered the Chicago market with the June acquisition of boutique house Edward Roberts International LLC, which had staged wine auctions in Chicago and San Francisco on a small scale since 2001. The proprietor, Edward Brooks, was retained to run Acker’s Chicago operations.

At its first Chicago event on October 22 at the Trump International Hotel, Acker Merrall grossed $3.55 million in an evening sale of 813 lots, which were 92% sold. The highlight of the evening was Domaine de la Romanée-Conti, with three magnums of 2002 DRC selling for $67,100, followed by the sale of six magnums of the 1990 DRC La Tâche at the same price. A week later, at the four-star Tru restaurant, Hart Davis Hart grossed $4.68 million on a sale of 1,337 lots, with the lots 100% sold. A 12-bottle case of 1982 Chateau Lafite-Rothschild handily blew by its pre-auction estimates of $28,000 to $42,000 to sell for $57,360. A case of the 2000 Lafite sold for $26,290.

Those two events were viewed by some observers as critical to U.S. auction bragging rights. In 2010 Acker Merrall was the biggest auctioneer of wines globally but took a back seat to Hart Davis Hart in the U.S. This year, through November 1, Hart Davis was in the lead domestically, with $33.2 million in sales. Acker Merrall’s U.S. total was estimated at $28.1 million, though its operations in Hong Kong, with $45.1 million in sales, have become much bigger. Hart Davis runs no auctions at all outside Chicago.

Acker Merrall CEO John Kapon pronounced himself satisfied with his Chicago debut. “For our first auction in Chicago, we came, we saw and we drank,” he declared in an online message to Acker customers. “I’ve long admired the food and wine culture of Chicago,” he said in a separate interview. “It’s one of the best in the world. This was a logical next step for us. We figured it was time to plant a flag here and get a little piece of the pie.”

Hart Davis Hart vice chairman Michael Davis, who’s been running auctions independently in Chicago since the mid-1990s, downplayed the significance of Acker Merrall’s arrival in the Midwest. “This is a national and an international business now,” Davis said. “We’ve competed for a long time against all the New York houses for wine consignments around the country. We’ll continue to do so.” But he added that, with the long-time presence of a third auction house in the marketplace (the Chicago Wine Co.), Chicago is now likely to be viewed as a prime destination for serious collectors. “Acker Merrall’s arrival here is likely to bring more attention to the Chicago marketplace, and that will make it better for all of us here,” he said.

Chicago is also home to online auction group Bacchus Wine Auctioneers. John Komorowski, a Bacchus appraiser who attended both the Acker Merrall and Hart Davis events, noted that Acker elected to start bidding at 5 p.m. on a Saturday. Evening auctions are rare in Chicago. “Acker was really breaking new ground in Chicago with bidding going late into the evening,” he said. “From what I could see, the bidding seemed very strong.”

The grandaddy of wine auctions remains Chicago Wine Co., which got its start in 1974. The firm doesn’t publish results, but holds events monthly at its headquarters in the Chicago suburb of Niles. Simon Lambert, a Chicago Wine executive who has been running auctions for nearly three decades, said that Acker Merrall’s arrival means that “obviously collectors have more and more places to sell and buy wine now. There’s nothing wrong with healthy competition, we believe.”

The freewheeling auctioneering style of Kapon, who drinks copiously from wine glasses aligned at the lectern while maintaining a running commentary on his favorite vintages, was a hit with the Chicago audience. So was the Acker policy that allows guests to bring their own bottles to uncork. “Too many auctions are held in a quiet room with coffee served to the bidders,” said Alan Factor, a business consultant who was a prominent bidder at Acker Merrall. “Acker opens lots of bottles during the bidding, and collectors are also opening bottles. Buying great wine while you’re drinking great wine is the right way to get people into the spirit of the event. I think it’s a good thing.”

Kapon is scheduling future Chicago events for January and May of 2012. His goal is to gross $10 million at three sales in Chicago in the first year. He predicted that the company could end up grossing $110 million worldwide this year, which would represent an increase of more than 10% over the 2010 total of $98.5 million.

In addition to three Chicago events, Acker is scheduling nine auctions in New York and six in Hong Kong for 2012. Asked whether the firm would consider other new markets like London, Kapon said that management at Acker “has talked about London. There’s obviously a lot of great wine over there, but much of it is leaving London and being sold elsewhere. It’s more of a sell-side market there and not a buyers’ market. Even so, maybe one day we’ll pop over to London and hold an auction.”

 

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