Tim James: High wine prices at retail and auction

The recent Strauss & Co auction of Cape and foreign wines (the theme this time being Rhône varieties) was another success – though more mutedly so than some of last year’s sales. A very healthy majority of wines were sold. There were some high prices, but more than half (according to my quick appraisal) went for less than the lower estimate of expected price (the auction house always gives a range in which it expects a sale to be made). This contrasts with some of the results in auctions last year, many of which observers thought frankly absurd. The most successful of the local producers in this latest auction was (as so often) Sadie Family, for a range of reds, including a case of Columella 2009 which reached a net price of R3713 per bottle.

But there’s been a healthy correction, I’d say, with a more realistic idea of value, less affected by various pandemic factors – it’s not hard to guess that last year wealthy wine-lovers had more cash to play with on wine, as they were not traveling, going to expensive restaurants, etc, not to mention wanting a bit of added fun in their shutdown lives. And not to mention many buyers being probably quite naïve about this new auction marketplace – thinking that no price could be too high for Paul Sauer 2015, for example: if they tried to re-sell some of those purchases now, it’s unlikely they’d come near getting what they paid. Last year’s auction prices were not sustainable.

We still need to see how the wine auctions will settle down over a few years, but their role in the South African wine market does look entirely plausible, and they have established the credibility of a secondary market to an extent that I admit I quite wrongly doubted in the early days.

The secondary market does make for an interesting perspective on a list of the most expensive wines in South Africa, such as Christian compiled on this website last week. Sadie Columella and Kanonkop Paul Sauer, for example, do not feature on that list – though auction results would put previous vintages high on it. The prices of CWG Auction wines should also, arguably, be reflected in such a list – volumes of some of them are larger than for some on Christian’s list, and some are, in effect, regular releases.

Most of the retail-most-expensive wines do not seem to participate, let alone successfully, in the Strauss auctions. One reason for that could be that many of them are made in tiny quantities – but actually that generally shouldn’t remove the best such wines from the realms of financial speculation (quite the reverse – just look at burgundies, for example). But many of them are possibly sold mostly overseas (and one does wonder with a few of them how many get sold at all!). How often do you see a bottle of 4G Venetia’s Heart trying to find a local buyer? (Wine-searcher.com has only six listings in the whole world for it, by the way – I can’t see where they are, but suspect mostly in Germany and Switzerland.) A few magnums of 4G Private Review 2009 were sold on local auction for not much more than the asking price for a Venetia’s Heart 750 ml bottle, and six standard bottles of the same wine went for a mere R3414 each (all prices given here are inclusive of buyer’s premium and the VAT on that). Two three-bottle lots of G 2010 rather unsurprisingly went unsold, having failed to meet the egregiously ambitious lower estimate of approximately R13 000 per bottle.

A few others on Christian’s list haven’t done spectacularly well on auction, comparing with the price of the current release. De Compostella has featured regularly, some unsold, but with bottles receiving between a modest R1707 and an impressive R3713. Vilafonté Series C is one of the best established, perhaps, of these very expensive wines, and it usually does quite well on auction, along with Series M, if not spectacularly so. True, the 2011 went for just R1138 per bottle (compared with the current R1650), but the 2010 has got prices around R2600.

Other results should have troubled the producers, perhaps. De Toren Book XVII 2011 went for R2560 – less than the retail price of the current 2018. Delaire Graff Laurence Graff Reserve 2012 has featured twice: the first time the case of six went unsold, the second time it got R2845 per bottle – substantially less than the asking price of R4000 for the 2015. Waterford The Jem has featured quite frequently – but often going unsold. A case of the 2009 went for R2276 per bottle, but the 2006 didn’t even reach the R1950 charged for the current 2015.

One has to wonder what the significance of these lower prices is. And, of course, the significance of so many of the very expensive wines not appearing at all on the secondary market (thus far). Can it be that, in some cases, the ultra-high prices are something of a marketing ploy designed to pull up the whole range – and the producers don’t really expect to sell more than a few of them? Even internationally – I see few of them listed on, for example, the website of Handford Wines in England (where winemag.co.za correspondent Greg Sherwood MW is, as we know, a champion of Cape fine wine generally, and an advocate of higher prices for it). Incidentally, I see there that Sadie Columella sells for slightly more than Vilafonté Series C, whereas in South Africa it’s very substantially less! We can’t get into that question here, though.

There’s no doubt that the last year or two is going to have a major effect on the pricing of the best and most-in-demand Cape wines – and on some fondly imagined by their producers to be among the best. Covid-19 has played a part in this. As I suggested recently, last year’s successful push to export fine wines when they couldn’t get sold locally is going to reduce volumes available here, and almost certainly lead to higher local prices. And it looks like the secondary market is going to have its desired effect, of bringing top South Africa wine into the unattractive realms of speculation.

• Tim James is one of South Africa’s leading wine commentators, contributing to various local and international wine publications. He is a taster (and associate editor) for Platter’s. His book Wines of South Africa – Tradition and Revolution appeared in 2013

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