NEWARK – When the gavel came down on the last of 1,190 separate lots of some of the world’s finest wines during a live online auction conducted over three evenings last week, Newark became a major player in the fine wine auction arena alongside New York, London and Hong Kong.
The auction was the first of scheduled monthly events to take place in Delaware that are being conducted live and online by Acker, the New York-based auction house founded in 1830, from its new storage and auction facility that opened last month in a warehouse at 1800 Ogletown Road.
According to Acker, the event turned out to be a real world-beater, netting $6.5 million in sales and breaking 152 world auction performance records.
“We’ve been working on this opening for six months,” Acker Chairman John Kapon told Delaware Business Times during last week’s auction. “There are a lot of advantages to locating in Delaware – tax advantages, friendly business laws, and a great place for wine investors to store wines.”
Though perhaps less well-known than Christie’s and Sotheby’s, which also auctions fine art and other luxury goods, Acker – more formally known as Acker Merrall & Condit Companies – has the oldest retail wine shop in America, dating back to 1830, and is the world’s largest wine auction house.
In 2020, it had sales of $122 million worldwide, while Sotheby’s sold wine worth $92 million – both were increases over 2019, exemplifying the growing market for fine wines. In addition to Delaware, Acker has major auction facilities in New York and Hong Kong.
Much of the world’s collectible wine is never actually consumed but instead purchased in bulk as a financial investment for resale on what is called a “secondary market” at some future time. While individual collectors may house in their residences all or part of their wine collections, which sometimes reach many thousands of bottles, investment firms often store them in temperature- and humidity-controlled warehouses. As Sotheby’s worldwide head of wine auctions, Jamie Ritchie, noted a few years ago, large private wine collections generally come up for auction because of “the three D’s – death, debt, and divorce.”
Until recently, most wine auctions took place in person, conducted in large, well-appointed auditoriums at the auction houses’ headquarters, with additional bidding being done by phone, and presided over by a fast-talking auctioneer whose bang of a gavel signaled a lot has been sold.
But two additional kinds of online sales have taken place in recent years, both accelerated by the COVID-19 pandemic lockdowns which prevented in-person meetings. One is open online auctions, similar to silent auctions, where bidders can do so over a set period of days. But live online auctions, such as the one that occurred last week in Newark, are conducted in real time. The huge number of lots involved, in this case nearly 1,200, necessitated that the event take place over three nights from Jan. 13-15.
“We are trying to have weekly wine auctions in Delaware, but there’s a limit right now,” Kapon said.
Many auction houses also have retail wine shops located where their auctions take place – a requirement in New York City – and Kapon said Acker was “looking into” a retail facility in Delaware as well. The company incorporated in Delaware in June 2020, and now has 10 employees.
Acker is known in the wine trade as being the least buttoned-down of the wine auction houses, and it gives fanciful names in its catalogs to the people whose collections are up for bid. In the Newark auction, the three sellers of cellars were identified only as “The Professor,” “The Architect” and “The Golden Phoenix.”
Under state law, Acker cannot ship sold wine from its Newark facility to other states, so buyers who want to move their wine must pick it up in person, make arrangements to have it transferred elsewhere in Delaware or arrange with a common carrier to ship it out of state with the necessary permits and licenses.
Lots put up at auction may vary from a solitary bottle to a case of wine and are often in larger formats, such as 1.5-liter magnums. Each lot has a “guide price,” or estimated selling range, and, in the case of last week’s auction, is usually listed for one or more thousands of dollars. The winning bidder must also, in addition to paying the bid or “hammer price,” pay an additional 24.5% “buyer’s premium” to Acker.
The next auction scheduled for Delaware is a live one beginning at noon Monday, Feb. 1. Anyone wanting to bid in the auction must first register on Acker’s website, www.ackerwines.com.
By Roger Morris