Visiting the wine auction | 'An average of 165 euros for a bottle'

With its natural stone facade and a large window revealing nothing that goes on behind it, Sylvie's auction house differs little from the other office buildings at the end of the Leien, near Het Eilandje. However, those who open the glass door, located beyond the entrance hall of the former seamen's church, step into a warehouse filled with thousands of legendary bottles. On the right, you see a rack full of Château Latour, a mythical estate in Pauillac. Further on, there are bottles of Mouton Rothschild, another well-known name from the same appellation. And so it goes on, from a case of six bottles of Petrus to a magnum of La Tâche from the renowned Domaine de la Romanée-Conti, and even a lot of Dom Perignon champagne from 1973. This must be the most delicious warehouse in Belgium.

Managing director Aart Schutten stops here and there during the auction preparation to inspect a lot, including three bottles of Mouton Rothschild from 1990. The labels - designed by the Irish-British painter Francis Bacon (1909-1992) - are lightly stained, but the fill level is still excellent, says Schutten. 'We call this "base of neck".' He points to the base of the bottle neck, where the wine is filled up to, just below the level of freshly bottled wine. 'Not bad for a wine over thirty years old.'
 
Meticulously Described

With his inspection, Schutten concludes the preparation for the largest auction Sylvie's will hold in its 36-year history. The auction comes with an online catalogue, where each bottle is meticulously described and photographed. 'An auction takes place almost entirely online,' says Schutten. 'Hardly any prospective buyers come to inspect such a bottle in person anymore. Many of our buyers bid from abroad. That's why we try to provide as much detail as possible in the catalogue about the condition of each bottle, from the capsule to the fill level. Good information leads to a successful auction, where no one feels deceived when they receive the bottles.' Where do all these bottles come from? 'The vast majority comes from Flemish and Dutch private cellars. Occasionally, a professional dealer wants to auction some, but almost everything you see here comes from collectors' collections. Sometimes, they realize they will never drink their stock, or they sell them because the prices are skyrocketing.'
 
More Cola Than Wine

Not every bottle offered by a wealthy individual is suitable for auction, says Schutten. 'You want bottles with some prestige that are also rare.' Rare does not necessarily mean super expensive. In lot 4328, there are six bottles of New Zealand chardonnay from 2020, Kumeu River by Mate’s Vineyard, a domain that has quickly gained a strong reputation. They are bottled with a screw cap and have a combined estimated value of about 350 euros. That is considerably less than the single magnum bottle of Le Pin from 2000, which is expected to fetch 7,000 euros.

Sylvie’s only wants to offer bottles in good condition. Before a bottle makes it into the catalogue, a cellar master examines it. An old Riesling from Egon Müller is not selected for the auction. The capsule and the fill state are insufficient. Also, a bottle of d’Yquem, whose content looks more like cola than wine, will not make it to the auction. 'We do this to avoid trouble afterward,' says Schutten. 'We don't sell bottles that we have doubts about.'
 
This also applies to possible counterfeits. The most expensive bottles in the world, such as Petrus, the wines of Romanée-Conti, or the Super Tuscan Sassicaia, are often counterfeited. 'You can't imagine how crazy it gets; everything happens. Scammers print fake labels or steal bottles from the winery. Everything has been done at least once.' The cellar masters examine such bottles with UV light, looking for secret markings that the domains apply, sometimes on the bottle, sometimes on the label. Schutten is wary of counterfeiting. His American colleagues at Acker, the world's largest wine auction house, were involved in the forgery scandal around master fraudster Rudy Kurniawan.
 
Rarely in Investment Portfolios

Schutten estimates that the December auction could generate over two million euros. In 2023, Sylvie’s will achieve a turnover of fourteen million euros, confirming its status as the largest wine auction house in the Benelux. Schutten, a former banker at ING, took over Sylvie’s almost seven years ago. He guided the auction house into the global top ten, alongside famous auction houses such as Christie’s and Sotheby’s. Sotheby’s is auctioning 25,000 bottles from the Taiwanese billionaire Pierre Chen until the end of 2024, with an estimated sale value of fifty million dollars (over 46 million euros).

As a major specialized auction house, Sylvie’s plays a key role in the global trade of top wines. Some buyers log in from London, Los Angeles, New York, or Hong Kong, places with a high concentration of wine investors and traders. Sylvie’s primarily deals with private collectors and traders. 'These are parties that need to find that one magnum of Le Pin or other rarities for a client. We see fewer investors. They are not as interested in old wines. Some investors buy cases of the latest Bordeaux and Burgundy vintage en primeur and store them in a warehouse. Other funds wait until prices are less volatile and buy slightly older wines. However, rare, old wines like the ones we auction rarely end up in investment portfolios. Our end customers are mainly collectors.'

There seem to be more of these wine enthusiasts. 'A generation ago, top wine was difficult to access. You couldn't just buy a thirty-year-old bottle of Mouton Rothschild, even if you had the money. Now, with online auctions, these bottles have become more accessible. You can bid on an old Petrus from the comfort of your sofa.' This increased interest explains the rising turnover of Sylvie’s. 'We auction more valuable bottles than ever. The average price is also increasing. In this auction, you pay an average of 165 euros for a bottle. The bar is constantly rising.'

In early December, 17,000 bottles went under the hammer. The oldest was a Madeira from 1863, and the most expensive was a magnum of Romanée-Conti from 2009. (editor's note: the auction ultimately raised over 2.2 million euros)

Wine Almost Not Meant to be Drunk

An estimated 99 percent of global wine is sold only once. The end customer drinks the bottle and thus ends its commercial life.

A tiny group of rare wine bottles is frequently traded before they meet their end. Some are never uncorked but are continually resold. This is the fate of wines with illustrious names such as Petrus, Romanée-Conti, Angelus, Cheval Blanc, and d’Yquem. Occasionally, new names join this select group. Since the famous Wine Advocate awarded it a perfect score of one hundred points, the Grüner Veltliner Unendlich from 2018 by the Austrian domain F.X. Pichler has been traded more than consumed.

For investors, trading in such top wines is an alternative investment. It serves as a diversification for their investments in stocks, real estate, or bonds. In this way, the secondary wine market is comparable to the market for art, vintage cars, rare watches, or a Tyrannosaurus skeleton. The top wine market boomed between 2003 and 2010, thanks to a few spectacularly good harvest years and an influx of Chinese and American money. The Liv-ex 100, an index that collects the prices of the hundred most traded top wines, showed a more than threefold increase in those seven years. From 2011, prices declined again, although records were still set for many Bordeaux wines from the 2010 vintage. Since then, reasonably good years have alternated with short periods of price declines, making the wine market reach an all-time high in early 2022, just before the war in Ukraine. 2023 was not a good year for wine investors. The Liv-ex 1000, the price indicator for the thousand most traded wines, fell ten percent between January and the end of September.

For those who want to invest in wine, they can do so by buying and selling bottles themselves, although it should be noted that wine is less liquid than stocks or bonds. Like the art market, auctions play a crucial role. Therefore, costs are also high. Anyone buying a bottle at Sylvie’s pays a commission of nineteen percent on top of the hammer price.

Investing in top wine can also be indirect, by buying shares in a fund. The best-known is The Wine Investment Fund in London. It invests in wines from about thirty legendary Bordeaux estates, such as Petrus, Angelus, Cheval Blanc, and d’Yquem, which are at least four years old. The fund achieved an annual return of five percent between 2004 and 2022, although investors have to deduct costs, such as the management fee of one and a half percent and entry fees. The fund requires a minimum investment of £10,000 (over 11,500 euros).

A third form of investment is a hybrid between drinking and collecting. Participants pool cash to buy exclusive bottles. Some of the purchased wine is seen as an investment, while members drink the rest. The French Ficofi is a pioneer of this type of wine club. In Belgium, a group of wealthy individuals led by sommelier Pieter Fraeyman (Hertog Jan) will soon launch their own initiative under the name The Generous.