What would happen if you were the seller of goods or services (I can’t think of a for-profit enterprise that doesn’t sell something) but you have a very sagacious clientele that insists on low-balling you at every opportunity? You want $100. Your client tells you she’ll pay $60. You want $1000. Your client says $650. Painful if you’re not on the buy-side, yes?

So over the course of major wine auctions that took place between, say, autumn of 2008 until the summer of 2009, this is exactly the scenario. Believe me, I have been one of those low-balling clients; the auction catalog arrives and I peruse it with great anticipation because I know how depressed the fine and rare wine market is. Can I get a bargain? Well it’s certainly worth a try. So I carefully read through a thousand or more lots scheduled to appear on the auction block and map out my strategy. As a guide to bidders, the auction house publishes in the catalog a low estimate and a high estimate of the price their experts believe each lot will sell for. One lot might consist of one bottle, one case, or any combination of wine, bottle size, and vintage.

But if you owned the auction house and your entire reputation rides on how much wine you sell and how high the price, perhaps you’d carve out a strategy to deal with all of these miscreant low-balling bidders. What if in the catalog, your published low and high estimates were generally very conservative (now you’re low-balling the bidders) so bidders would think they were going to be able to load up on cases of valuable wine at fire-sale prices? And then when you got them all gathered in the same room you beat them senseless with auction hammers until every last wallet was flatter than our current economy? I think that is exactly what Hart Davis Hart (HDH, one of America's most respected and prestigious auction houses) did during its September 12 auction. That day 1134 lots went out the door, most at ridiculously high prices. Whether intentional or happenstance, this was an excellent sting and I’m sure some bidders went home at the end of the day walking funny. I'm not suggesting that bidders were fleeced in any way - we were just outsmarted at our own game.

Were these extravagant prices a result of pent-up demand? Very likely. But also what was smart was publishing such low estimates in the catalog and then once the competition and fury began in the bidding room, the rest just took care of itself. By the way, not all estimates were low: some were near or at record highs like the best vintages of Lafite and other First Growth Bordeaux. In fact Bordeaux made a spectacular comeback, with Château Lafite-Rothschild making some of the largest gains in price since the crash. A case of 1982 Lafite sold for $38,240, including the auctioneer’s take of 19.5%. A case of six magnums of 1982 Château Petrus sold for an arresting $65,725. In their catalog, HDH estimated this lot to sell somewhere between $24K to $35K. Smart yes?

Nearly everything sold that day showed respectable, if not remarkable, gains redolent of the boom days, although in general, California collectables did not fare as well except for Sine Qua Non. Prices for typical Californian auction darlings such as Screaming Eagle, Harlan, and Shafer seemed to be hammered down (forgive the pun – or not) but Italian classics such as Sassicaia and Gaja along with the Rhone La La's and top Burgundy fared much better.

The bottom line is this: prices are rising quickly so we’ll feel this at retail very soon. Buying a good vintage of an occasional bottle of Lafite or pretty much any Classified Bordeaux is soon going to be much more expensive as are many other collectables. If you see bargains out there at retail or auction, and there still are a few (including some Californians), right now is the time to grab them up. Also if you’re willing to be patient and age some wine, bargains are still available from some great young vintages like the 2005 Bordeaux, although the word ‘bargain’ in this context is relative.

The most profound effect of this recent auction was the Asian influence because they have all the cash these days and were high bidders on many of the most expensive lots, according to HDH. Fine and rare wine auction houses in the past couple of years have even begun conducting auctions in Hong Kong, which has certainly driven prices up. It was probably less than five years ago that China was emerging as a financial powerhouse and its successful purveyors were just starting to find enjoyment in western-culture luxury goods. Because they didn’t know any better, Chinese wine drinkers were buying up expensive Classified Bordeaux and mixing it with ice and Coca Cola. I believe they have learned to do without such appurtenances these days.

I have no problem with anyone including Asians; we’ve seen Japan buy up American assets like there was no tomorrow, then the Arabs, now the Chinese. But I wouldn’t be honest with you if I said I didn’t feel a little sad about the greatest wines in the world again becoming too expensive for most Americans and finding its way to foreign shores. So sting or not, the outcome of this latest auction is not favorable to American collectors.

David Boyer