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Hospices prices short of expectations

Published:  23 July, 2008

Despite a much-hyped (2005) vintage, and the presence for the first time of Christie's and telephone bidding, wines on offer at last week's 2005 Hospices de Beaune auction failed to reach the kind of stratospheric prices that many ngociants had anticipated.

The 145th auction took place on Sunday 20 November and was conducted for the first time by Christie's. Prices for the highly rated 2005 vintage showed a moderate rise of 11.02% on the average price per barrel over 2004, to e4,806. Reds were up 14.09% on average, to e4,373; whites up 8.92% to e6,815; while the larger number of barrels on offer (789) and the high prices secured for some of the top wines (as high as e61,000 for the symbolic pice des prsidents) took the total value to e3,798,330, up 25%.

The results have, however, been deemed a disappointment by some commentators, including local paper Le Bien Public, given the involvement of the international auction house and the excellent quality of the vintage for both reds and whites.

Alain Suguenot, the mayor of Beaune and president of the Hospices board, had held out the hope that Christie's (whose role was resented by some smaller players in the trade) would attract bids from major collectors around the world and that charitable instincts would prevail over market forces. But while some absentee private buyers took advantage of the opportunity to bid by phone (another innovation this year), it was the Burgundy ngociants who, as in the past, sustained the market.

Hopes before the sale were unrealistically high, with predictions of a rise of 30-50%. More sensible estimates from local ngociants had been in the 10-15% range. Despite the promise of the new young wines, prices were probably restrained by the large volume of the 2004 vintage - to be offered en primeur early in the New Year - and the generally stable state of the market. A relatively short lead time for Christie's and low reserves also seem to have prevented a higher rise.