How Wine Auctions Work and When They Started
The first wine auction dates back to 1443 in Burgundy, France. The chancellor of the Duke of Burgundy built the Hospices de Beaune hospital for people without funds.[1] In 1447 grapes were donated to the hospital and sold, the proceeds were used to organize charitable events for the Hospices. The process continued until 1859 when it was modified into an auction house.
First-Ever Wine Auction
While wine auctions started in Burgundy, soon they began to take place in London, England. On February 20, 1673, the first-ever wine auction was held at Garraway’s Coffee House, Change Alley in London.[2] In 17th century England, most trades for commodities and shares took place in coffee houses.
The Change Alley was formerly known as Exchange Alley and later became the London Stock Exchange. Wine auctions in the 17th century were nothing like today. The auctions were held “to the candle.” While in the modern world, the highest bidder wins, in the 17th century, the last bidder standing when an inch-long candle burns out won the bid.
The Garraway Coffee House, Change Alley, continued to host exchange activities until 1866 when it was demolished. Only a panel remains today with the words “place of great commercial transaction and frequented by people of quality” inscribed.
Christie’s First Auction
London’s auctioning business did not stop with Change Alley. It was carried on with James Christie, who became an influential figure in the Wine auctioning business. Christie was born on July 1730 in Perth, Scotland.
He worked as a middleman for the Royal Navy until 1750 when he left to start his business. He moved to Pall Mall, London, where he was involved in various companies. On December 5, 1766, Christie’s held its first auction at Pall Mall, London, England.
The auction involved “More than three dozen cases of Bordeaux — also known as claret — and Madeira made it on the block that day, making it one of the biggest features of the event.”[3] Christie’s auction business went on to become a global auctioneering business.
Wine Auctions in the United States
Wine auctions have become a regular phenomenon in contemporary society. They take place throughout the world, from Cape Town, South Africa, to Napa Valley, California, to Burgundy, France, and more. In 1969, Christie’s conducted a wine auction in Continental Hotel Plaza, Chicago, selling up to 55,000 dollars of European and Californian wines.
Subsequent events in New York faced challenges and were unsuccessful. In 1981, Napa Valley held the first auction organized by small winemakers, including Robert Mondavi. It involved: “Hundreds of wine enthusiasts and auction-goers from across the nation, as well as a growing number of international guests, travel to the Meadowood resort in Napa Valley to participate in a gala weekend of tastings, dining, art shows, and auctions.”[4]
The proceeds were used for charitable events and were one of the most successful in the United States. It continues today, following the steps of the Hospices de Beaune wine auction. In addition, Auction Napa Valley has increased the visibility of Napa Valley wines in the international market.
The first legal wine auction in the United States was held in 1994 in New York. The legalization for the auctions created a framework to improve the Wine auctioning business in the United States. As a result, they have become a daily phenomenon.
Besides, technology has revolutionized trade by introducing online auctions. The covid pandemic grounded this with the introduction of remote auctioning. Some winemakers organize online-only auctions as well as physical ones.
Operation of Wine Auctions
There are three types of wine auctions, first-hand, second-hand, and online wine auctions. The First-hands are live auctions held at the wineries or wine companies. They are often for charitable causes, gauging market response, or product promotion.
Also Read:Wine Tourism in the United States
Second-hands are held by auctioneers such as Christie’s and Sotheby’s. These events can be live or silent. Silent auction involves writing and placing bids next to wine bottles in the company cellars. These companies also offer investment-grade wines.
TheHospices de BeauneorHôtel-Dieu de Beauneis a former charitable almshouse inBeaune,France. The original hospital building, is now amuseum
Online auctions are held remotely. Bids are placed and accepted remotely. Bidders can place bids from anywhere in the world. The auction process starts by placing a starting price on a bottle of wine. Wines can be sold by bottle, lot, box, or the entire collection. After setting the starting price, bidders raise their prices, and the highest uncontested bidder wins.
First-hand and second-hand auctions involve expensive wines. However, with the advent of online auctions, one can get aged wines at attractive prices. London and New York were the biggest wine auction capitals, but Hong Kong has risen to be the world’s favorite.
For instance, “in March 2019, Hong Kong held another record-breaking auction with total proceeds exceeding $35 million.”[5] The world wine market continues to rise with the development of new wine auction markets opening in India, Russia, and China. See more articles here
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This Day in Wine History
February 20, 1673 – On this day, the first recorded wine auction was held in Garraway’s Coffee house, Change Alley, in London, England. The building was famous in the 17th century for trading commodities and shares; it was the first building to sell tea to the public. The auction was the first among many auctions that have become ubiquitous.
March 11, 1744 – The fine art company Sotheby’s was established on this day. The company is one of the largest wine brokers in the world. The company’s wine subsidiary, Sotheby’s Wine, specializes in wine auctions in different places, including Hong Kong, New York, and London.
Sotheby’s Wine holds more than twenty auctions each year in these locations, specializing in rare and fine wines from Bordeaux, Burgundy, Napa Valley, Champagne, and Sonoma County. These include France’s First Growths such as Chateau Lafite and Burgundy’s elegant Pinot Noirs.
The company offers a global opportunity to buy and sell fine wines. In addition, the company has expert advisors for anyone that wants to buy or sell Wine. As a result, it has built an excellent reputation, becoming a trusted source in wine auctions.
November 6, 2021 – On this day, the most expensive wine was sold at an auction. The auction was held in Emeril Lagasse Foundation, New Orleans, to raise finances to support the youth by mentoring, inspiring, and creating opportunities to push them to reach their potential.
The auction’s proceeds were also aimed at improving the youths’ skill development. The “2019 Glass Slipper Vineyard Cabernet Sauvignon, Setting Wines” was sold at one million dollars, making it the most expensive wine ever sold at an auction.
References
[1] Tom Mullen, “How Wine Auctions Began,” Forbes, March 23, 2020, https://www.forbes.com/sites/tmullen/2020/03/23/how-wine-auctions-began/?sh=13d542fd3f80.
[2] Alem Temsu Ao, “Revisiting London’s First Wine Auction in a Coffee House,” londoninsepia, February 20, 2017, https://londoninsepia.wixsite.com/londoninsepia/single-post/2017/02/20/going-once-going-twice-sold.
[3] Ted Loos, “For Wine Auctions, It’s Been Another Very Good Year,” The New York Times, October 2, 2018, sec. Arts, https://www.nytimes.com/2018/10/02/arts/wine-auctions-spirits.html.
[4] Mike Thompson, “Napa Valley Wine Auction,” lcweb2.loc.gov, 2000, https://memory.loc.gov/diglib/legacies/loc.afc.afc-legacies.200002758/default.html.
[5] Divine Magazine, “How Do Wine Auctions Work,” divinemagazine.biz, June 18, 2020, https://divinemagazine.biz/how-do-wine-auctions-work/.
