Auctions 18 September 2019

Fine wine auctions in South Africa have had something of a chequered existence. The very first (modern) sale was conducted at Fairview in the early 1970s, followed by Nederburg, the great granddaddy of them all, which launched in 1975. In the early 1980s, an amendment to the liquor act enabled Sotheby’s to trade privately owned collectable wines. A year or two later the Cape Independent Winemakers Guild introduced an annual sale of the special bottlings produced by its members. Suddenly it seemed the wine auction business was booming.

The political and commercial isolation of the 1980s produced its own pressure-cooker economy. There was a certain ebullience to auction pricing: Nederburg’s turnovers exceeded estimates, as did Sotheby’s. For South African wine collectors seeking the unusual or prestigious, auctions were the place to shop: the falling rand and unfriendly international suppliers forced everyone to adopt “local is lekker” criteria.

For a decade or two the auction scene ticked along, but lost a little steam along the way. By the 1990s Sotheby’s (then Stephan Welz & Company) abandoned wine collectors’ sales: the revenue wasn’t worth the cost of handling the stock. By the early 2000s Nederburg yielded ground to the Cape Winemakers Guild, whose more modern offering caught the zeitgeist of the punters. With plenty of fine wine about, auctions hardly mattered. The cannier buyers worked out that very few current release wines were really rare, while most of the older wines lacked the sex appeal of the millennial age.

In the last few years it looked like it would only be a matter of time before the roller-coaster would grind to a halt. The established mainstream auctions kept reducing their offering in order to fake a sense of shortage. The problem with this strategy is that to meet the not insubstantial overheads of setting up an annual event, an auction needs a certain amount of turnover. The reduced volume did not yield a commensurate increase on bottle prices, or commission earned.

This year has felt the first gusts of change: a Cape Town wine merchant has teamed up with Strauss & Company to offer wines from private collectors at properly curated sales. The idea is to establish a trading platform which would help to grow a wine investment market. Then Distell, proprietor of the Nederburg Auction, decided to de-brand the event to make it available to the industry as a dedicated Cape wine platform, relaunching it as the Cape Fine & Rare Wine Auction.

The Wine Cellar-Strauss programme launched with a finely assembled catalogue of generally desirable wines in Johannesburg in June but yielded quite tentative results: The organisers over-estimated the tolerance of buyers to part with R1000 per bottle, no matter the reputation of the producer. Last Saturday’s Cape Town sale fared little better: less than 70% sold on the day, and the average hammer price of the local wines continued to hover around the R1000 mark. While this was generally below mid-estimate, it is hardly a frivolous sum to spend on a bottle of wine.

The Guild auction, which features current release auction cuvées created by its members, takes place on 5th October. It will be followed by the Cape Fine and Rare sale two weeks later. I was a member of the selection panel briefed to create a widely representative catalogue of fireproof quality investment grade wines, so I can hardly claim to be neutral about the auction. There are just-older-than-current-release craft wines as well as carefully selected classics, with some of the older bottles recently re-corked as an added quality guarantee.

No one can pretend there isn’t a lot of fine wine about – more perhaps than the market is ready to absorb. With consolidation in the wine auction sector inevitable, the Cape Fine and Rare wine sale may offer a template the industry will have to consider: a high profile destination event which attracts major international buyers and brings out the best reserve wines from the Cape’s leading producers.

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