It was a good year for fine wine in 2011 with auction houses reporting solid sales but the bubble has burst in the Bordeaux market and prices are expected to fall further in 2012.
Wine sales at auction house Acker Merrall & Condit topped $110 million this year. Christie's estimated its sales would be more than $90 million, while Sotheby's wine auctions hit $85.5 million and Bonhams finished at $17 million.
"I think generally speaking demand in Asia has changed from 'buy at any price' to 'buy at what I consider a reasonable price,'" Sotheby's Jamie Ritchie said about the drop in Bordeaux prices.
"We'll see less wine coming onto the market in 2012 and I think that as supply tightens, pricing will firm up," he added.
Richard Harvey, of Bonhams, agreed. He attributed the drop in prices to ample supply.
"Undoubtedly, the economic situation has put a slight dampener on it, but that's less important than the amount of stock coming onto the market," he explained.
Harvey predicts prices for Lafite, Latour, Margaux, Haut-Brion and Mouton will remain stable, or even dip further in the first three months of 2012.
Cases of 1982 Lafite, which sold in March for more than $60,000 a case, were fetching less than $45,000 at auction. The dip makes it unlikely that the 300 bottle lot of Chateau Lafite-Rothschild with vintages between 1981 and 2005 that was sold for more than $539,000 will reach that level again soon.
Prices for Burgundy, specifically Domaine Romanee-Conti, are expected to remain high because the amount of wines produced in the region is so small.
"It all comes down to the law of supply and demand," Harvey said.
But in Burgundy itself, auction prices were lower this year. At the Hospices de Beaune auction in November, where wealthy wine enthusiasts bid in a yearly sale whose proceeds are donated to charity, the average prices were down by 6.2 percent for reds and 12.9 percent for whites.
The star of the Christie's-led auction, the President's Lot, a 460 liter barrel, sold for 110,000 euros ($143,490), a steep drop from the 400,000 euros ($522,000) it raised in 2010.
"The fine wine market is in constant evolution," said Ritchie. "I still have a pretty good outlook in terms of the growth of the fine wine market in the long term. There will be new buyers, new collectors, new drinkers from around the world."