Millennials move in on wine auctions as China tariff opens door

For more than 55 years the biennial Barossa Wine Auction has lured those keen on rare and vintage wines from the prized region of South Australia. This year, however, all eyes are on new collectors – millennials aged in their mid-20s – who are taking over the once-strong Chinese market interest.

The event now includes two live auctions – the first held in the Barossa on April 16 and a new ticketed event in Sydney on April 29. An online auction runs until early May, while a live stream in Hong Kong is aimed at expat collectors.

More than 160 lots from 50 Barossa wineries will feature – think Henschke, Yalumba, Rockford, a Thorn-Clarke single-vineyard Shiraz 2018, and a very rare bottle of Penfolds Grange Imperial.

In previous years, wine collectors from China, Taiwan and Singapore would fly in to be wined and dined by the Barossa Grape and Wine Association, and were often the highest bidders on collectable Penfolds Grange Imperial bottles that sold for more than $60,000 in 2019. But with COVID-19 halting international flights and a Chinese government-imposed five-year tariff on Australian wine imports finalised just weeks ago, Barossa winemakers need to find a different audience.

Langton's Head of Auction Tamara Grischy says a new demographic is muscling in on the wine-collecting scene in Australia.

"A younger customer has emerged between the ages of 25 and 35," says Grischy.

"They're a sophisticated wine drinker and collector keen to be part of this auction journey. It'll be interesting to see what happens to the demand and pricing of some of these bottles come auction time," she says.

The Langton's business has seen a 50 per cent increase in sales during COVID-19, with wine collectors getting younger and looking to invest while they can't travel abroad. According to Grischy, the average age of a collector pre-COVID was 35-50 years old.

"Anything that is highly collectable like art, cars and now wine has gone through the roof in the past 10 months," Grischy says. "The fact we're selling more top-end wine to those in their 20s is a sign they want in on it too."

Wine collectors will bid on 68 Magnums, eight Double Magnums, 13 Imperials, one Salamanazar and a very rare Melchior [18L] bottle that you'd never find at your local bottle shop – with these precious cellared finds making their way to auction at the discretion of the winemaker.

From Torbreck RunRig 2017 Imperial to Barossa Young Guns of Wine Collection, and a Hutton Vale Ultimate Authentic Barossa Experience, the lots range from $200 to $60,000.

Barossa Grape and Wine Association CEO James March anticipates strong interest from Australian collectors this year.

"Collectors are looking for brand recognition, surety and collectability will attract wine enthusiasts. There's many in Australia looking to start a wine collection and it's a trend we're seeing develop," March says.

The Barossa wine region would typically export 60 per cent and sell 40 per cent locally. That figure has flipped according to March, who says COVID-19 and China-imposed tariffs now see more than 60 per cent of its customers in Australia.

While all roads did once lead to China, March is confident the Barossa winemakers will survive the $1.3-billion export hit, as they did when the GFC caused export havoc in 2010. The region already exports to 100 countries.

"We have always had a presence in Japan, Korea, Taiwan and Singapore as well as existing in the US, UK and Canada, but haven't been as focused as we were on China," March says.

"Our job is to build on that recognition of the best Barossa can offer, which we did so successfully with the Chinese market and will do with other countries now," he says.

"The interest from China will play out differently this year, with many Chinese Australians living here and able to store wine for their families until they come to visit again, it remains to be seen who will be the highest bidder."