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Retailers, consumers and prices

Arbitrage in Bordeaux

May 13, 2011

New York’s branch of Christie’s is auctioning a collection of 64 bottles of Mouton-Rothschild on Saturday that spans the years 1945-2007.  It’s Geneva branch is auctioning a collection of 315 bottles spanning the same 62 vintages, but from all five first growths including Mouton-Rothschild on Tuesday.  (See story “Mystery collector to sell rare wines” [ID: nN10231397])

Saturday’s lot is selling for between $100,000 and $150,000, while Tuesday’s is estimated to sell for $696,000 to $929,000. And the price difference presents collectors with an arbitrage opportunity.

Assuming that the wines sell at the upper end of their estimates, buying Saturday’s lot for $150,000 would represent a $35,000 savings.  Granted, Tuesday’s lot has one more bottle of Mouton-Rothschild – the chateau produced two labels in 1978 and 1993 – and the Geneva lot has all four, while Saturday’s lot only has three.

And unlike Tuesday’s anonymous French collector,  Saturday’s is  California attorney Allen Grossman, who has been collecting for 40 years and waxes poetic about Mouton-Rothschild, saying of the top Bordeaux, “I have tasted them all many times. They are all wonderful wines, but I’m  just partial to the Mouton.”

$1=0.8608 CHF

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