Editorial: Are wine auctions bad?
By Christian Eedes, 23 July 2024
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Eben Sadie was at his messianic best at the recent tasting of the Sadie Family Wines new releases, ranting against “the grey-marketing, trading and brokering” that is driving wine prices up far beyond what is set by the original producer. Sadie is proud of the fact that 50% of what is produced under his label is sold in South Africa whereas according to him most premium producers around the world are compelled to sell 85% of their wines outside the country of origin. “Wines should live in the place where it came from,” he says.
What’s bothering Sadie? Strauss & Co Fine Wine Auctions, the venture begun by retailer Wine Cellar, sommelier Higgo Jacobs and the auction house, has become a key player when it comes to a secondary market for local wine (although the likes of Stephan Welz & Co are also trying to get on the auction). The just-launched 2022 vintage of Sadie’s red blend that is Columella costs R1,200 a bottle but at a recent Strauss auction a six-bottle case of Columella 2019 sold for R41,038 (including buyer’s premium and VAT), the equivalent of R6,840 a bottle and other vintages weren’t too far behind.
“Keep cost price the same and triple my selling price and I could make a lot of money but that’s the route to cocaine and Bugattis,” he says. “I’m not interested in selling to the super-wealthy.”
Sadie is particularly irked by private buyers who choose to resell to other resellers. “It’s destroying our industry. We are not cultivating a wine-drinking culture,” he says before relating how much pleasure it gives him to hear that his electrician or plumber has enjoyed this or that bottle of his wine. Though it doesn’t immediately appeal to him, it sounds very much like he’s considering intelligent labelling to monitor the journey of each and every bottle to end-consumer.
Sadie might pitch his concerns about the secondary market as making wine increasingly less egalitarian, but you suspect that at least part of his irritation is that third parties are profiting hugely from both his intellectual capital and physical labour.
However distasteful the emergence of wine auctions locally might be for Sadie, they can’t be viewed as inherently good or bad. It could be argued that the Strauss’s appearance on the scene is an indication of the SA’s wine industry’s first tentative steps away from being essentially commodity based to something where its value is not measured in merely utilitarian terms.
Auction prices for the meantime appear volatile, which is to say that there have been results that are wildly unrelated to the item’s intrinsic value but at the same time, they are also helping to slowly but surely determine the true market value of SA’s top wines. Put succinctly, recent vintages of Columella are probably worth more than R1,200 a bottle but less than R6,840.
Clearly, not everyone has equal access to auctions as they necessarily favour those with more resources and while this might pain wine lovers of a more left-leaning persuasion, they aren’t going to be wished away. What Wine Cellar and sommelier Jacobs are bringing to bear when it comes to auctions is their market knowledge and experience as well as their established relationships with potential buyers. You trust that all involved are applying due diligence to the condition and authenticity of any wine that comes up for sale and that reserve prices quoted are fair and competitive…
Sadie, meanwhile, is not the first producer who wants to control the distribution process as much as possible – what he’s noticing is that there are increasingly channels over which he has no influence and more to the point, where none of the resulting revenue accrues to him. Urging us all to drink his wine rather than treat it as a tradeable asset is just clever customer relationship management.
To read about recent personnel changes at Sadie Family Vineyards, click here.
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Bruce Ellison | 26 July 2024
I’m not sure why strauss or the seller sd get any grief? Personally, I had assumed it was a cellar release – noting many cellars have used Strauss as a medium.
Eben does sell some of his older wines from the farm at a market price, more aligned with Strauss than release. It’s a great position for him to be in (well earned) and it is great to sell out your wines released and have a back catalogue too. He has the choice on his release price and volume, and his stock. I don’t think he really saying he’s against trade – if so, he sd consider how people who most wish to try his wines, but who were not part of the closed release list, gain access? Ultimately the sensible pricing of OVS, limited quantity and 5 year + recommended “wait”creates a gap for investors. This is quite something – I have been in SA 25 years but I can’t say there’s much that has appreciated in $ terms, certainly not many SA wines. So, Sadie is currently a welcome exception. Eben could delay release or raise prices. But, I don’t see how Strauss offering the wines sd get flak, noting a willing buyer and seller?
Personally, I think he’s right to want a breadth of customer, and people to drink them, this builds brand equity and reputation esp in SA – Which is his base.. I note, his latest Voëlvry rose, Pinotage and chard wines are similarly priced, for earlier drinking. The Columella and Palladius are super premium wines, sold at higher prices and quantities – so, perhaps traditionally a harder sell; but this is his real financial bread and butter. If u buy OVS you are expected to buy these too.. But, i suggest OVS has become a brand champion that is helping to drive the greater business success. The fact that Columela is selling at 7k a bottle with its volume is a big deal, but it was a perfect 100 point wine. So, Eben and SFW is a class act – with product and its marketing. The rest of the industry has priced based on his position. But, I don’t see (m)any wines trading at 6x on strauss. So, my verdict is this isn’t really about strauss but a rather unique offering. Strauss may currently sell the most acclaimed and rarest wines, but as an auction house it is young. Auction is the most honest way of getting a true market price at any point in time and there’s not much Sadie to go around. I suggest the prices will continue to go upwards. Eben is the only person who can affect this; in some ways he saying he is trying to suppress it? (Not on columella a 1,2k a pop). That said,, if he was to hold back supply, OVS stock may be even more sought after.
PeterW | 24 July 2024
I have massive respect for Eben and all he has done and passionately continues to do from continually encouraging those around him in the Swartland and leading the way with planting varietals that may be more successful with climate change, I particularly applaud his approach to seeling those wines, bottled only in magnums and sold locally through winebars and restaurants by the gllass with clear instructions not to resell any bottles. We enjoyed a glass of the grillo and the counoise at Marble last November just before returning to the UK – made for a special memory of being able to drink what are by definition unicorn wines.
GillesP | 25 July 2024
Valid comment , but I would raise the question on who is making the big money on these special wines? Eben or Marble? I bet on Marble
Gareth | 27 July 2024
I would dearly have loved to try the Counoise. What was it like?
GillesP | 23 July 2024
To add a few things to the topic, I happened today to go to the Strauss collection place in Cape town to collect a few bottles bought at this very same auction and had a very nice chat with the person facilitating the collection who told me that the seller who I won’t name was motivated to sell part of his collection because he has too many wines and realised he has to let some go because he will never jad the time in his life to drink them. Just offering a perspective on the motivation. While at the same it happens that some buyers are ready to splurge more than R6000 per bottle on Columella 2019. It’s a bit uncontrolable. Maybe in fine this is serving Eben’s wine notoriety and how much he can price his wines in the long term as much as I command him for wanting to keep it under control for wanting people to buy for drinking.
GillesP | 23 July 2024
Were you attending the afternoon session Christian because you were certainly not there in the morning one which makes me ask? Secondly, Eben had a rent at the wine writing journalist capabilities with exception of Tim James and Michael Fridhjoen which made me ask myself if it was not directed at you and some others.
James Bosenberg | 23 July 2024
Having recently enjoyed a tasting with Eben at the farm, not to mention read countless articles and listened to release videos, there is no denying the passion and work that goes into what he and the rest of his team are doing. His career and what he has achieved is incredibly inspiring and I have no doubt that his frustration is born mainly out his wines not being shared among wine loving friends. Sure, there is some resentment about people profiting off of his success, but I believe at his core, he wants locals to enjoy and talk about his wines.
To echo Jos, his demand far outstrips supply and his wines are globally recognised to be world class. He could get 3-5X more from cellar door but he has refrained to do so. That speaks volumes about what his ethos is and how he wants his wines to be enjoyed.
He also happens to be a great story teller and his story definitely adds to the romance of Sadie Family Wines, but show me a farm that doesn’t have a story to tell (or at least try to tell).
I think we ought to applaud Eben’s philosophy and long may it continue!
Jos | 23 July 2024
The idea that Eben is annoyed that he’s not profiting from resellers rings kind of hollow when he is selling his wines for way less than what he could. Most of his wines sell out within the first week of release which means that demand is outstripping supply meaning he can easily hike the price… yet he doesn’t.
Maybe he really just wants people to drink his wines.