A wine chemist tastes wine. (Photographer: Alaistair Miller/Bloomberg News)

Why Would Anyone Ever Pay $558,000 for a Bottle of Wine?

(Bloomberg) -- When a private Asian collector bid an eye-popping $558,000 for a single bottle of 1945 Romanée-Conti at Sotheby’s sale this past Saturday in New York, a world record was smashed. This was not just the highest price ever reached for a 750ml bottle of Burgundy, but also the highest for any bottle of wine ever at auction.

Moments later, a second private collector, from the U.S., paid $496,000 for a second bottle of the same wine, and that too broke all previous records, minus the new one that had just been set.

Which begs the question: Why would someone pay half a million dollars for a bottle of wine?

After all, you could buy many cases of superb vino—even stellar Burgundy—for the same price, which amounts to about $100,000 per glass. (The Liv-ex online wine market points out that 133 bottles of 2010 Château Pétrus, a one-bedroom flat in London, and 400 ounces of gold would each set you back the same amount.)

Well, the 1945 Romanée-Conti is a very, very special bottle, the rarest of the rare. Here’s why.

Fabled Vineyard

All the wines from the Domaine de la Romanée-Conti, in the charming, tranquil town of Vosne-Romanée, are famous, sought-after Burgundies. An entire mystique surrounds the domaine, which is known by the nickname DRC. Farmed biodynamically, its grand cru vineyards are meticulously cared for, the grapes sorted individually.

But of its seven fabled reds and one white, those from the tiny 4.5-acre Romanée-Conti vineyard are absolutely iconic, the epitome of the highest-quality Burgundy. The late food writer Richard Olney once called this plot of land “timeless perfection.” Several years ago an extortionist threatened to poison the vines unless the domaine paid him a €1 million ransom. (He was caught.) The 2015, which I tasted earlier this year, has amazingly complex aromas, long, savory layers of earth and spice flavors, and a silky texture that transfixes your tongue.

‘Unicorn’ Vintage

The 1945 vintage is legendary, a virtually unobtainable “unicorn wine.” The year was hot overall, the wines super-concentrated, and thanks to hail and frost, production was small. Only 600 bottles of Romanée-Conti were made, and, at this point, very few are left. There is really no normal opportunity to get it.

Furthermore, after the harvest, the vines were ripped out and the vineyard replanted. The next vintage of Romanée-Conti was 1952.

Jamie Ritchie, worldwide head of wine for Sotheby’s, said in a phone interview, “If you want to drink the world’s most special bottle of wine, this is it.” Although he’s sampled most of the world’s greatest wines, Ritchie admits he has never tasted the 1945. (Neither have I, but I’m happy to be invited anywhere for a sip.)

A Hong Kong Burgundy lover once told me he’d kill to get his hands on the 1945. He’d missed the chance to bid for one at a 2011 Christie’s wine auction in Geneva where a bottle brought $123,899, besting the then world record. He wanted to drink it but also brag about it, he admitted.

Profit Potential

Ritchie hopes the two buyers, whom he describes as passionate Burgundy lovers, will drink the wines, and not resell them again at a profit.

Super scarcity and the current global thirst for Burgundy, especially DRC, make them pretty solid investments, though there’s no guarantee other collectors would be willing to pay quite this much.

Since 2010, Liv-ex’s Burgundy 150 index has climbed 108 percent, as reported in its 2018 Burgundy Report, though Brexit is taking a toll. In the past year, the great 1990 Romanée-Conti has appreciated more than 20 percent, and 3,862 percent since 1999. There are no such statistics on the 1945 because you hardly ever see it.

Immaculate Provenance

Another reason for the excitement at Sotheby’s Saturday auction was the wines’ immaculate provenance, which adds to the investment value as well as potential longevity. 1945 was more than 70 years ago. Though Romanée-Conti is famously long-lived, and the concentration in the 1945 ensures it’s not going to die anytime soon, the conditions in which it was stored made the difference between a great wine and vinegar on the skids.

The two wines were in a 100-lot collection of Burgundy belonging to one of the most respected men in Burgundy, 85-year-old Robert Drouhin, whose family runs Maison Joseph Drouhin, founded in 1880. The 219 bottles and 7 magnums of DRC wines on offer, including the 1945, had rested quietly and happily for decades in his pristine cellar, until they were boxed up and transported from Beaune, France, via air to Sotheby’s East Coast warehouse.

His family owns significant vineyards in Chablis, Côte de Nuits, Côte de Beaune, and elsewhere in Burgundy and is also one of the region’s major negociants. From 1928 to 1964, Drouhin’s father, Maurice, was also the exclusive distributor for DRC’s wines in France and Belgium.

Which means that the wines on offer traveled only a short distance from where they were made to the pristine storage conditions of the nearby Drouhin cellar, before their big debut decades later.

And in a world where fake Romanée-Conti keeps turning up in the news, this kind of provenance is the ultimate guarantee of authenticity: “…the pleasure is the wine itself but also the history and the scarcity,” Robert Drouhin observed in the catalog.

No wonder the bidding for the two bottles at Sotheby’s was, as they say, “frenzied,” as a New York real estate developer battled with an online Asian bidder, who won the prize.

The total sale brought $7.3 million, more than five times the high estimate. Ninety percent were lots of rare DRC. Burgundy is as hot as ever. Will the prices ever stop going up? Luckily, Drouhin has kept some rare DRC for his own family to enjoy.

©2018 Bloomberg L.P.