The Battle for Wine Auction SupremacyJanuary 11, 2012
Last month, management at Acker Merrall & Condit in New York trumpeted an announcement that the firm had achieved the ultimate triple crown in 2011—ranking No.1 in wine auction sales in the United States, Asia and the world. A few days later, archrival Hart Davis Hart Wine Co. in Chicago issued its own press release contending that it was the top auction house in the United States in 2011 with $37.4 million in sales, retaining the leadership it held in 2010.
So who was the market leader? Acker Merrall reported U.S. sales of $41.6 million for 2011, but that total included $8.2 million in online auctions. Excluding the online contribution, Acker Merrall’s U.S. total was $33.4 million, ranking it behind both Hart Davis and Zachys, which grossed $36.4 million in sales last year.
Acker Merrall CEO John Kapon asserts that in a digital age it’s time for the definition of “auction” to be expanded. “The wine we sell online is still wine—it’s still an auction,” he says. “We’ve been doing online auctions for 10 years, and I don’t see any reason not to count those sales along with the others.”
At Hart Davis, CEO Paul Hart begs to differ. “Online auctions are a very different animal,” he says. “They serve different functions and are frequented by different buyers. A lot of smaller auction houses are set up to do them very well. To us, live bidding sets the real benchmark in sales.”
Other industry players appear to side with Hart’s view. Duncan Sterling, head of New York auctions at Sotheby’s, which ranked No.4 in the U.S. last year with gross sales of $13.5 million, observes that “an Acker online auction can go on for an entire week. That’s not the same thing as a live auction. You’re not comparing apples to apples. We believe the best results are gained for our clients in one- and two-day sales.”
Top executives at Hart Davis have been paying more attention to a small year-to-year decline in sales than national rankings. The firm’s 2011 sales were down 5% from the 2010 total of $39.2 million. Hart blamed a flattening in Bordeaux prices and a big dip in particular in Chateau Lafite Rothschild prices amid waning interest in the label from Asia. Paul Hart estimates that Lafite’s prices in Chicago last year were down between 20%-40%, depending on the vintage. “All of Bordeaux took a turn down last year after a couple of big growth years in 2009 and 2010,” he says. “That’s okay. You can’t expect to have crazy growth every year.”
If Acker Merrall becomes number-one in live auction sales this year, it will likely be due to its expansion to Chicago. The firm plans a Chicago event on January 28 and two more after that. Acker Merrall will have nine sales in New York and six in Hong Kong, the same as 2011. “That’s about the right number for the markets we’re in,” Kapon says. A decade ago Acker Merrall conducted occasional auctions on the West Coast but then dropped the schedule. “We have no plans to go back to the West Coast,” Kapon says. “We’re quite happy being in Chicago.”
Acker Merrall’s global auction total last year reached $110.5 million—including online sales—up more than 12% from its global total of $98.5 million in 2010. Acker’s Asian sales rose 9% to $68.8 million. Meanwhile, Sotheby’s worldwide total slipped 3% to $85.5 million from 23 auctions—13 in London, six in Hong Kong and four in New York. Sotheby’s Sterling says the firm will boost its New York presence this year with five auctions on the calendar. “In the coming year we may see the Chinese market cool a little bit,” Sterling predicts. “But we’re seeing rising interest from other parts of the world, particularly from South America. With the Olympics and the soccer World Cup coming to Brazil, Rio and Sao Paulo are becoming wine collecting strongholds.”
Hart Davis has reaffirmed its intention to remain a Chicago-only venue for wine sales. But the firm is reaching out more aggressively to other markets. On January 26, Hart Davis has a major tasting of 1989 and 1990 Bordeaux scheduled at Bouley Test Kitchen in New York, an event that sold out quickly at $395 a person. “We put on tasting events in New York, Los Angeles, Singapore, Hong Kong, Beijing and elsewhere,” he says. “We’re working hard to dispel the Second City myth here.” By taking the U.S. live auction sales crown for the second year in a row, Hart Davis has certainly done that.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.