Auction Season

Over the past several years, the wine industry needed adjustment. Wine prices escalated for reasons that sometimes made no sense, egos swelled, the importance of critics’ ratings were overblown and many other silly factors changed the tenor of the industry. Change can be good or bad, but it’s usually painful. It has come fast and furious in the past few years and now with the wine industry getting a big smackdown by the current recession, these changes are fascinating.

In 2002, I attended the New York Wine Experience with Pierre Seillan, the Winemaker for Vérité. We tasted all the great wines of that era (from cults like Screaming Eagle and Harlan to Premier Crus like Mouton and Lafite). I asked Pierre, “What’s with the pricing of Vérité?” The first release of the wine was priced at $150 a bottle! Pierre’s answer was that Jess Jackson, his boss and owner of Vérité, priced the wine in line with the top wines of the area, a common practice back then.

Wine price also follows the auction, retail and restaurant markets, which in turn follow the scores given by the two most influential wine publications—Robert Parker’s Wine Advocate and The Wine Spectator. Wineries often employ a consultant to advise on how to produce their wine to garner high ratings from the critics. Once that happens, supply and demand change the price, and the winery’s following vintage has an increased price to match the demand. The auction, restaurant and retail markets follow this trend. This vicious cycle pisses off the winery owners, because the middleman makes more money “flipping” their wine then they do! Well, the tide has turned. The market for expensive wines dropped off the cliff last fall, the auction markets took a nosedive and the market for wines above $30 a bottle fell after years of expansion.

Over the past several years, the wine industry needed adjustment.

So where are we today? I just finished bidding at Sotheby’s New York Auction. I noticed how the low and high estimates in the bidding catalogue have changed drastically since the recession started. Then, during the bidding, I noticed that big name wines were once again being pushed up, not like before the Great Recession, but still. I stayed away from those and focused on some lesser-known wines that I know to be great and found some good deals.

Wine sales and customer counts at restaurants are also floundering. The same old pricing structure and boring wine lists push more people to consider bringing their own. Now I can understand this if you’re going to a restaurant with a crappy wine program. But not at a restaurant with a well-designed and appropriately-priced program. There are civility rules to BYOB when going to a restaurant that has a Liquor License: 1) Call first to see if it’s allowed. Don’t assume. 2) Check what the corkage fee is. 3) Bring something special to celebrate a special occasion and never bring something that is on the list. 4) It’s also a good idea to order something off the list to accompany your bottle.

If you think that it is all right to march into a restaurant with your bottle of wine without following any of the above, then: 1) You’re wrong and 2) Would you bring a bottle of Grey Goose Vodka to a bar? I understand everyone must deal with the recession, but if your favorite restaurant doesn’t make any money (or enough), they will simply close the doors and that would be everyone’s loss!