It’s 8pm on Sunday 17th of November 2013, and the bells of the Hotel Dieu ring out the end of the famous wine auctions.
So what does this year’s auction tell us about Burgundy wine?
First, what is the aim of the auction?
The Hospices de Beaune, which was built by Nicolas Rolin (Chancellor to the Duke of Burgundy Philippe the Good) in 1443, owns 60 hectares (150 acres) of vineyards in the Côte de Beaune (primarily) and the Côtes de Nuits districts of Burgundy. A barrel from each of these vineyards is put up for auction.The town of Beaune has been hosting the auctions since 1859. The aim of the auction is to sell barrels (“pièces”) of Burdgundy wine belonging to the Hospices to raise money for hospital charities.
Infact the culminating point of the auction is the sale of the “President’s Barrel” , this year a chardonnay Meursault Genevrières barrel containing 456 litres.
What were the results?
Red wines (333 barrels)
Average barrel price 12,638€ (+28%) 4 208 600€
White wines (110 barrels)
Average barrel price 14,149€ (+20%) 1 556 400€
Total wine sales (443 barresl)
Average barrel price 13,014€ (+27%) 5 765 000€
Despite 15% less yield in 2013, the auction proved once again that Burgundy wine is a true and rare “liquid assset”. The Pinots saw a greater increase than the chardonnays, who, despite being left behind half way through the auction, pulled back somewhat towards the end. What can we conclude from this? Two things:
1/ Burgundy wine is becoming an even rarer commodity that wine enthusiasts are buying up to the last drop.
2/ That prices will rise even higher in the coming years.
Why is this? Well, as can be seen from this years auction, the Chinese are well represented (the President’s barrel was sold to a chinese business woman). Despite the fact that the Chinese are notoriously red wine lovers, they are buying Burgundy whites too. I believe that this is because all top Burgundy wine is becoming a rarity – that same bad weather combined with supply and demand problems – and that the Chinese will buy any top Burgundy wine as a financial placement and as a guarantee against any wine shortage. Hence the inevitable price rise.
The emblematic Burgundy estate owner – Louis-Fabrice Latour – was even quoted as saying that the days of 10 euro Burgundy are over! This is a worrying scenrio for wine traders who fret about the domestic and middle-range markets…
Getting back to the “President’s barrel”, some criticism was shed on Christies, who ran the auction, as they were accused of not being implicated enough on the sale of the president’s barrel. Certain observers remarked that Christies could have dug into its rich client portfolio to help raise more money for this prestigious barrel. It took some courageous and heartfelt haranging from the president Clothilde Coreau, to get the bids from 110 000€, where it seemed to get stuck, to a more reasonable 130 000€. At 5.07 pm the barrel was finally judged for 131 000€. Last year, Carla Bruni-Sarkozy helped the bids reach 270 000€!! Maybe Pinot instead of Chardonnay and a bigger boost from Christies could have helped the total reach 500 000€?
The president was not too upset, understanding that the international economic crisis has been felt around the world this year, which explains more subdued bidding.
Everyone is hoping that after 4 poor yields, 2014 and 2015 will bring some joy to Burgundy and to its millions of fans. Her’s to a successful 2014…