Loss of Heritage Has the Market Seeing Red

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Wine auctioneer Mark Wickman believes that the Australian wine auction market is in for a shaky year as hundreds of thousands of bottles of wine, from defunct wine investment scheme Heritage, gets dumped onto the secondary market.

The collapse of Heritage Fine Wines isn’t just bad news for its former investors. Mark Wickman of Wickman’s Fine Wine Auctions, believes that as Heritage’s stock gets released from storage, investors looking to quickly recoup losses will dump their wine onto the secondary wine market and create a slump in Australian fine wine prices.

“Imagine seeing 16,000 bottles of a single wine coming onto the market at once,” he said.

“Even if the wine is a good drinking wine with cellaring potential, the demand for it will not be enough to absorb the stock and the price will plummet, which will in turn affect other wines as the demand for these will slow as buyers put their money into the cheaper option.

Reviewing the estimated value of the wine, Wickman questions if the liquidators have applied a “blockage discount” to the valuation.

“Normally a concept applicable to works of art and quantities of stock, blockage discount can be defined as the measurable effect of the release of a large quantity of the same or similar assets into a precisely defined marketplace,” he said.

“When dealing with a product like fine wine where scarcity constitutes part of certain wines’ appeal and market value, it’s easy to understand how a market surge can depress prices.”

All this leaves vendors with only two real options to uphold the auction value of their wine – wait until the market has recovered from the influx of surplus premium wine or get in early while supply is on equal footing with demand.

With the release of seized Heritage wines expected to begin hitting the auction markets early in the New Year, Wickman suggests that the next few months would be the most opportune for those contemplating selling wine, with buyers expected to be the winners during 2006.

Wickman’s Fine Wine Auctions will be holding a fine wine auction in January 2006 and welcomes expressions of interest from potential buyers and those interested in submitting wine to be sold.

About Wickman's Fine Wine Auctions;

Distinguished by innovation and driven by passion, Wickman’s Fine Wine Auctions has been a lively and profitable meeting ground for wine buyers and sellers since 2003. A family business based in South Australia, Wickman’s prides itself on its position as a reliable resource with a well-spring of extraordinary values and opportunities.

Throughout 2005, Wickman's has continued to launch unique initiatives in an attempt to set the company apart from traditional online wine auction websites. Starting with very low sellers and buyers commissions, Wickman's introduced a regular charity section into the auction format in February and subsequently launched a new style auction newsletter in August in an attempt to get away from the dry, uninteresting format used in the past. Recently guaranteed provenance on certain lots was incorporated and the auction process livened up by offering each bidder the chance to win prizes at the conclusion of each auction.

Being a good “neighbour” in a global community is an important part of Wickman’s corporate identity.

“Philanthropy is in our blood,” explained Wickman, referring to his family’s commitment to annual fundraising.

In the last three years, Wickman’s has auctioned wine and wine-related services generously donated from wine companies from Australia and overseas and raised over $16,000 to benefit The Multiple Sclerosis society, The Asian Tsunami Appeal, a local South Australian charity; The Eyre Peninsula Fire appeal and the Adelaide Women and Children’s Hospital foundation.

For additional information contact:

Mark Wickman

Wickman's Fine Wine Auctions

PO Box 1270

North Haven

South Australia, 5018

Australia

Website: http://wineauction.wickman.net.au/

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