Anything can happen in the auction industry: lots selling for recording-breaking prices, withdrawals of national-treasure grade items, or counterfeits being sold for whopping prices, and the list goes on. Yet, despite all these uncertainties, a fine wine auction house adopts an unconventional practice: a guarantee of 100% sell-through rate. What is it all about? Gabriel Suk, CEO, Madison Fine Wine Auction, talks to us about the ideas and reasons for offering consigners a 100% sell-through rate.
Gabriel Suk, CEO, Madison Fine Wine Auction
Gabriel Suk: Madison Fine Wine Auction is Hong Kong's first locally owned fine wine auction house. We’re trying to bring and are bringing the lowest buyer’s premium to the industry, which is 16.5%, 8.5 points lower than standard Hong Kong-based auction houses. We’re offering 0% seller’s commission to any of our consigners, doesn't matter the size of your cellar.
And then we’re going to offer you 100% guaranteed sell-through rate, which I don’t think other people are necessarily offering. And the reason for that is that it is a demand-driven business. The supply side is low and the demand side is high. And that we know that people want these wines. Give us the wine, we’ll get you the estimate. We’ll guarantee it all sells.
To guarantee 100% sell-through rate, the auction house must carefully select wines of the best quality. Yet, there are so many fake wines in the market that even renowned auction houses and experience collectors fall victim to sometimes. How does Madison Fine Wine make sure the quality of the consignment is up to standard?
Gabriel Suk: We utilise the service of outside independent inspectors. The first reason is that we are a young company. Finding these people that are super-skilled and inspecting wine takes time. And it’s something that takes decades for people to learn in terms of learning inspection of wine. The second thing is we want people who are inspecting the wines that we’re going to sell not to have a perceived or an actual interest in serving our own needs.
Gabriel Suk: In this upcoming auction alone, we’re down to 400 lots because we found fake 1993 Le Pin double magnum old from a very reputable US house from one of the most reputable sales ever. We found fake Henri Jayer, we found fake Pétrus, we found fake 82 Le Pin. We are using 2 to 3 to 4 experts. We won’t tell the other person that we asked another person to look at it. If they are sure that it is correct and it’s real, we’ll sell it. If there is any question, any small question, we’ll take it out. Unfortunately, there are a lot of bad stuff out there. You can either try and pretend like it doesn’t exist, or you can actively attack the problem, which is what we are doing.
In response to technological advancement, many auction houses have started revolutionised the industry by introducing new technology such as blockchain. How does Madison auction react to embrace the new digital era?
Gabriel Suk: We have developed an online automated estimation system. You send us the thirty wines that you want to sell. We plug it into our system and base on this database that we have built that has about seven to eight years of every single auction result, every estimate, every hammer price, the system will take a look at that and based on the parameters that we ask it for. We’ll speak back an estimate immediately.
We believe that the business is database and the future is in the data because what is so valuable about these products is that they are so rare. But you can’t just count on the rarity alone to drive the sale. So we’re able to say to a client, “Okay, yes, you have a 1990 Petrus. Let me tell you the last 17 times it’s sold, what it’s sold for, what we think are the realistic results. This was an outlier that we threw out and we can tell you this is exactly what your product should be selling for in the market.
After decades of development, the art market in Asia has become more mature with a considerable group of collectors. What about the wine market in Asia?
Gabriel Suk: I moved to China in 2003 and really got involved in the wine industry in 2004. Primarily as a journalist, I was one of the first people who were writing about wine in China. What I would say about the Asian market is that it’s still young. It’s still very much at its infancy. Some of the best, most passionate, smartest collectors in the world are here in this region. And the government of Hong Kong has done something truly genius with creating essentially the world’s only free port for the sale, storage and transportation of fine and rare wine.
It has changed the global fine wine markets in ways that I think we are still not completely realising. As a locally owned wine auction company, Madison presents meticulously curated sale to meet the demand in the Asian market. For example, for this coming auction, we've got a three-litre bottle of 2004 La Tache, incredibly rare. They did not make many of those. We’ve got a 1.5 litre of magnum of 2003 DRC Romanée-Conti. We have 56 lots of the rarest, most impressive baijiu that’s ever seen in the market. If you are looking for highly curated, perfectly stored and well-sourced fine and rare wine, we have something that is incredibly special happening on 15 June here in Hong Kong.
Madison Fine Wine Auction’s Summer Sale
Auction date: 15 June 2019｜10:30am
Venue: The French Window
Address: Shop 3103, 3/F, IFC, 1 Harbour View Street, Central