Champagne ‘weakest performer’ in auctions but Port shines

Port and white Burgundy were the undisputed stars of fine wine auctions held in the second quarter of this year, show figures released by Wine Market Journal.

While the fine wine auction market continued its post-pandemic downward correction during the second quarter of this year following a brief upward bump during the first three months, according to figures just released by Wine Market Journal there were also some bright spots.

Port sales rose by 7.01% in value at auction for the second quarter of 2023 and is now up 14.16% for the year.

Burgundy showed mixed results, mostly trending positive considering the overall market. While prices for Grand Cru reds from Burgundy declined by a modest 0.95%, premier Cru Burgundy reds were up slightly at 0.54%, and Domaine Romanée Conti, which has its own index, rose 2.21%. There was also a profound upward trend for white Burgundies, which jumped 6.68% in value for the quarter.  

Italy blue chips held steady at auction with a 0.02 increase.

“There was a spike in high-profile auctions toward the end of the first quarter” which inflated that period’s surprising rise, David Parker, owner of the Wine Market Journal, explained. During the first quarter, both the WM 150 and the Top 500 grew by more than 4% each. 

However, Champagne was the weakest performer, down in price by 4.69%, Rhone wines declined 3.60% and California wines were down 3.26%.

Bordeaux First Growths lost a modest 0.96%, while Bordeaux Second Growths fell in value by 3.34%.

“There are several things going on here,” said Parker, “beginning with an extreme run up in auction prices for wine fine during the pandemic, perhaps because people had too much spare time. That run-up peaked around 11 March 2022.” 

Occurrences during the second quarter within categories, in addition to the disparity between Grand Cru and Premier Cru Burgundies, added to the landscape.

“For example, there has been more positive activity in grower Champagnes, which to me says there are still buyers looking for good options. It is actually an interesting time to be a collector, because now is the time to diversify your portfolio,” says Parker. 

It is still too early for a glimpse into whether the third quarter still show further decline or flatten off because, Parker says, there is not much auction activity in mid-summer.

Parker, who is also CEO of online retailer Benchmark Wine Group, notes that there has been a tightening between auction prices and retail prices on the secondary markets. 

“When there was the auction run-up during the pandemic, the prices were about the same between retail and auction, which was crazy,” he says. “Usually, there is about a 13% difference in favour of retail. So that’s always a trigger for reaction.”

Retail prices, Parker notes, are growing at about the same rate as inflation. 

The rise in online wine auction activity during the pandemic was not a factor in the directions the markets have taken, he says, while noting that “auction houses do like to save some of the best stuff for creating an effect at live auctions.”

Of course, even live auctions have an online or call-in component of bidders or their representatives. 

The results for the WMJ auction survey, which is now into its second decade of operation, were calculated on the basis of a weighted analysis of 108,337 individual results from 227 auctions monitored during the second quarter.