(Bloomberg) -- Something unprecedented has happened in the world of high-end wines: Bordeaux is on the outs.
In 2017, wine produced in the Bordeaux region of France slipped below 50 percent of Sotheby’s total wine auction sales for the first time in the auction house’s history. Prestige producers from the region, including Château Mouton Rothschild and Château Latour, used to dominate the market. Last year, though, Bordeaux represented just 42 percent of the auction house’s global sales, according to a report the company released on Wednesday.
“To be honest, when we looked at the numbers, that was a surprising statistic for us, too,” says Jamie Ritchie, the worldwide head of Sotheby’s Wine. “We weren’t tabulating these volumes in the 1970s or 1980s, but Bordeaux was consistently in the high-60th to low-70th percentile of value at auction,” he says.
The change can be attributed to the surging popularity of wines produced in the Burgundy region, which are led by Sotheby’s best-selling producer of 2017, Domaine de la Romanée-Conti. Sales of that wine represented, by value, “more than the top three Bordeaux—Lafite, Petrus, and Mouton Rothschild—combined,” says Ritchie.
Additional Burgundian high-performers were Domaine Armand Rousseau (second in value at Sotheby’s in 2017), Château Roumier (third), and Domaine Henri Jayer (fourth).
“Burgundy has been on the rise, and Bordeaux has been in decline, for a long time,” says wine expert Robert Bohr, of Delicious Hospitality Group. “The reality of the market is that the heat is certainly in Burgundy.”
It’s a classic issue of supply and demand, he says. Because Burgundy’s most prestigious producers release far fewer bottles than their equivalents in Bordeaux, Burgundy is quite rare at the very highest end of the market,
“When the top end of the market moves towards Burgundy, the prices move faster and higher because of scarcity,” Bohr explains.
Overall, the auction house’s sales totaled $63.8 million, down by more than $10 million from the 2016 total of $74 million. Although that decline may be somewhat misleading, given that the May 2016 sale of William Koch’s cellar totaled $22 million in itself and such market-moving sales don’t come every year. (“I’d be surprised if that’s the market trend,” says Bohr of the drop, “because the market is incredibly strong.”)
Even though Sotheby’s total sales were down, its market appeared to be diversifying.
The two highest lots of 2017 were both for bottles of Macallan Scotch: One buyer spent $987,994 at an auction in Hong Kong for 18 bottles of Macallan in a Lalique Legacy Collection set. Another set of six assorted bottles went for $474,359 in a retail transaction.
“Whiskys entered into the top 10 producers for the first time,” says Ritchie. “So that’s pretty surprising. We’re seeing the market broadening in certain areas.”
On a regional level, Asian buyers represented a 58 percent share of Sotheby’s sales, while those in the U.S. constituted 21 percent and in Europe, 18 percent. South Americans weighed in at a scant 3 percent.
“The Asian market is still definitely driving the wine market,” says Ritchie. “So when they say the Asian market is over—well, it’s very much not.”
©2018 Bloomberg L.P.