Yule Georgieva: Charles, so great to have you with us. Thank you for joining our podcast.

Charles Curtis: So great to be here. Thanks for having me.

Yule Georgieva: So before we get going with discussing auction houses and authenticating wine, let's just tell everybody who you are and what you do.

Charles Curtis: Sure. I always start the story when I was 17. I worked as a chef for 13 years. I trained at the Cordon Bleu in Paris, apprenticed at the Cuello d'Auxil. To me, that background in eating got me ready for drinking. And I loved the restaurant business, but when I was 30, I got married and had a kid, and then you realize that the restaurant business maybe isn't so good. So I got out of it and got into wine, did 10 years as a salesman for wholesalers and importers. And at the end of that time, I passed my Master of Wine exam, I did it in 2004, and I was made Director of Wider Spirit Education for Moet and NSE, so I spent four years doing that. Then I jumped ship and went to Christie's Auction House, and I was head of department, first in New York and then in Hong Kong. But then I decided to come back from Bongfalden. And so I left 10 years ago and set up shop as an advisor to private clients, buying and selling rare wines at auction. And that's what I've been doing ever since.

Yule Georgieva: And so within that sphere that you now have, your company, Wine Alpha, you advise clients, but you also authenticate wines, right?

Charles Curtis: I do. That's an important part of the job, but authentication is only, it's the sort of high visibility thing that people always think about, but the truth of the matter is that if you buy it properly, you're never going to have an issue with authentication. It's only if you buy rashly that you're going to run into problems. 

Yule Georgieva: Oh, well, I'm sure you'll give everybody all the tips on how to buy properly, so by the end of this podcast they won't need your services except for the advice part.

Charles Curtis: The advice part really is the important bit. I help on the buy side, I help on the sell side and I do help people clean things up if they think they've got issues. It's typically only when some new client starts with me fresh that they have issues and they want me to look at wine and typically they're very concerned about it and we do what we need to do to clean it up and then I get them a little bit of discipline and once they're buying in a disciplined way it isn't a problem.

Yule Georgieva: Great, well let's start by talking about auction houses since you have that great experience working for Christie's as the head of wine. So why are auction houses important? Why should collectors be buying on auction?

Charles Curtis: I think that auction houses are one important part of the mix. It's not the sole place I tell people to look, but it is definitely one of the channels. It's along with direct sales directly from wine estates, merchants, brokers, private sales. Auction houses should be an arrow in everybody's quiver. The reason I always say that is because when you buy at auction, you typically are sourcing wine that's ready to drink. And so many wines that you buy in the primary market, you're looking at at least 10 years, if not 20 years or more before it's striking at its peak. So I look at options as a place to buy things that are ready to go now.

Yule Georgieva: That's a great point. Yet for somebody like myself, who's starting their collection, I've been collecting for about five, 10 years now, but that's not a long enough window to be really enjoying certain wines at their peak. So to be able to buy on auction and get things from maybe 97 Brunelos or 2000 Bordeaux's or something, now would be a good time to be opening them.

Charles Curtis: Or really even much older than that. You know, I think the older the wines are, the riskier it is, and not necessarily because of questions about authenticity, but just questions of condition and storage, you don't really know. But over time, as you get more comfortable with buying at auction, you buy older and older wines. So typically the Bordeaux's that I'm enjoying now are from the 70s and the Fergandes I'm enjoying now are from the 80s and the Riesling's I'm enjoying now are from the 90s and you can source all that stuff on a Mola Sotus at auction and often you get it at a very good price. What people don't realize is that when you buy these wines off wine lists or merchants they're getting it at auction and they're marking it up. So why not cut out the middleman and buy it yourself?

Yule Georgieva: That's a good point. But at the end of the show, we're gonna have to get your top wines that you've enjoyed lately or top wines that you're enjoying right now, but you've already given us a little teaser with at least the decades. But before we get that, let's just do a quick survey of the auction world. So obviously there are some major global auction houses like Sotheby's and Christie's which are present in many countries. But let's just pretend that we're in the U.S. So for a U.S. buyer, what are the main auction houses to know? Are they online or in person? Are there any sort of secondary auction houses you can point us to? Give us a little bit of a picture of the auction world.

Charles Curtis: That is a very interesting question because actually, I mean, I think the first thing you need to do is to state right away that the wine market is a global market and savvy buyers, even if they start in the country they're currently living in, storing in, often will start to look at sourcing in other countries because it is a global marketplace and by playing that arbitrage you can really get the best deals. But looking at just the U.S., the important thing to distinguish is that there's essentially three different types of auction houses. The first, as you mentioned, is the Generalist House, which is the large international auction houses that handle art, they handle other collectibles, and they handle wine. The largest by far in the wine sphere is Sotheby's, followed by Christie's, who seems to be having a good year this year, and Bonhams, which is much smaller. Although Bonhams is small in the wine department, they're big in the spirits department, so don't overlook bottoms. And they've merged with Skinner in the U.S., which is a small option house in Boston. And then you've got the smaller players that are more regional in scope, like Heritage and Spectrum, that also handle a number of different categories. But in addition to those generalists, there's the wine-specific, the wine-only option houses. There's three main ones in the US, Akramarel, Zaki's, and Hart-Davis Hart, H-T-H out of Chicago. And those are the principal auction houses that have live auctions. And then there's the online only category, which is also an important number. That includes WineBid.com and Ideata Wine, which is based in Paris, but they ship to the US. So I always like to consider them. They get some interesting property at the time. So those are the main players. Then there's the retailers that offer online options such as K&L and Benchmark and some other players in California. So it's quite a lively scene with lots of places to buy.

Yule Georgieva: So you mentioned earlier that you do find it is sort of a global market and you don't need to restrict yourself to the jurisdiction in which you live, but do you mostly find that to be the case, that the price is sort of a global price for certain wines? Or do you find that there are quite a lot of these arbitrage opportunities where you could be buying in the UK, for instance, given that sterling is quite weak right now vis-a-vis the US dollar, and be benefiting there, whether because of the difference in currency or just because of the difference in market price?

Charles Curtis: Ah, not only is sterling very weak, but in the UK you can buy in bond and leave it in bond, you don't pay sales tax. And if you export it out of the UK, then you never pay the VAT. If you take it out of bond, then you pay 20% VAT right away. But if you leave it there and sell it in bond, then you've never been exposed to the tax. And if you buy in Hong Kong, you're not exposed to the tax. And Hong Kong seems like it's a long way away, but most of the auction houses that sell wine in Hong Kong will ship it back to the States for free. And so, you know, taxation is an important consideration for a lot of people. That's why recently, at a HDH and the ACRA have both started doing their auctions in Delaware because there's no sales tax. But then you're stuck with your wine in Delaware and it's a bit of a hassle to get it to wherever it needs to go. But we're, it's a brave new world and we're figuring it all out.

Yule Georgieva: Well, you're in New York, so a little road trip down to Delaware probably isn't too tough.

Charles Curtis: It depends, right? It depends on how much you buy.

Yule Georgieva: That's true. You can take a U-Haul van with you. So that's all very interesting about, especially knowing that a lot of these auction houses will ship directly to you without necessarily charging you a big markup. So it's a good thing to know for people. But one question that I think many listeners might have is, let's say they are sitting on a bunch of wine that they want to sell or they want to get into buying. Let's just walk through the process. And I know this is going to take a while since there's a lot of pieces, but let's start with a seller or a collector deciding to sell some wares, how they would go about that process and then we'll try to do the other side of the transaction, we'll walk through a buyer coming to an auction house and deciding to buy. So let's start with the seller. How would a seller go about contacting an auction house to get rid of some of their wines? 

Charles Curtis: Sure. So once you've decided that you want to sell some or all of your wines, you have to pick the auction house. A lot of people make the mistake of picking the auction house that they most often buy from or they sell with their friends, which is typically a bad idea. You wouldn't want your stock broker buying stocks based on who he liked and who he had lunch with last week. I mean, you wanna, financial decisions should be made on a financial basis. So in my opinion, what you need to do is evaluate the offers and the terms and conditions from all the different auction houses that are in the market. But an advisor like myself can help you do that and normally if you're just getting help on the sell side, people won't charge you because the auction houses are going to pay you an introductory commission anyhow. So you evaluate, you weigh the offers from all the different sellers and once you pick the house to sell your wines with, then you negotiate the terms and conditions. And it's important to go through the contract thoroughly because it looks like a lot of legalese and it is. And there's certainly there's a lot of things that can trip you up. And people I think a lot of times are not even aware of what the possibilities are. For example, it's often the case that you can get an interest-free advance before the wines at bulk auction. In fact, you usually can get the advance once they've picked up the wine and inspected it. You can often get a rebate on the buyer's premium added to the hammer price. And a lot of times you can get the fees waived, but if you just get a contract and sign on the dotted line, you're going to be paying an awful lot in additional fees and commissions that you shouldn't have to do otherwise.

Yule Georgieva: That's interesting. So there are terms that are boilerplate in the contracts, but there's other things that you can negotiate. So to be a savvy seller, you want to make sure that you're going for some of the things that you mentioned, right? Like getting fees waived and whatnot. So those are typically options on the table for those who know.

Charles Curtis: Right, exactly. There's lots of things on the table, including settlement terms, which is really important because the downside of selling at auction is if you sign a standard contract, then they're not going to start paying you until 30 days after the sale and the money will sort of trickle in as they get paid. But settlement terms along with everything, shipping, insurance, warehousing, photography, there's a lot of fees in a standard contract that you can negotiate away. you've settled out of the contract, then they start to market the sale. And at that point, they start shopping the sale around to their buyers. And you want to sort of stay on top of the process and see where they are. The majority of auctions are actually, people think it's the bidders in the room that are driving the sale. Really, it's the absentee bidders that track the sale. Typically when you go into an auction situation, you've got bids on at least 90% of the lots that are sufficient to sell it if nobody else jumps in. That's sort of the floor, the basis that you start the auction on. And then the bids that come in from the room or online, those are on top of the absentee bids. So you want to monitor the absentee bids prior to the sale. They'll market the sale by asking you for samples. You should always give them samples because then they'll put out events. They typically pay for the event and you give the wine for free. But that's when they entertain their top buyers and really generate interest around your collection. So all that is done before the sale. The sale itself is an event that happens in time and space, but it's really just one point in the process. There's been a buildup of at least, ideally, at least three, four months, if not longer, prior to the sale. And then there'll be the unfortunate period of collecting all the bills and everything after. So it's really like a six or eight window from the seller's perspective before the wines are actually sold.

Yule Georgieva: Well, interesting. Okay. So that's for a seller who has, let's say, an entire collection, right? Like let's say they have, I don't know, 2,000 bottles to sell. But what about somebody who just has a case, 12 bottles? Can they still participate in that same process or would they have a different process? 

Charles Curtis: Typically, if you just have a single case, it's not worth the effort that an auction house has to put out to include it in the sale. But a lot of times, if it's a case that's really interesting, they'll offer you a buyout price, which means you don't have to go through the entire process. Typically, the buyout price will be equivalent to what the low estimate would be. So often, they'll buy it at the low estimate, put it in the auction, and count on selling it at something higher than that.

Yule Georgieva: Okay. And would another alternative be to try some of those online auction houses, right? Like would, would K&L or winebid.com, would they accept smaller allocations or are they also looking for somebody with more bottles to sell?

Charles Curtis: Uh, Winebid is, is pretty good about accepting small-time, but typically if you've only got a single case, then you've got to pack it up and ship it to them. Yeah.

Yule Georgieva: Okay. No, that makes sense.

Charles Curtis: All right.

Yule Georgieva: So that gets us to the sale, to the point of sale. How about from the buyer's perspective? Let's say you're one of the buyers on the floor. What does the process look like for you?

Charles Curtis: For me, the most important thing, the advice that I give to all my clients, it wasn't always the case, but it is the case now, that I tell everybody they should look at the sale as far in advance as possible, figure out the wines that they want to bid on, come up with the bids that they think are reasonable, and place them as absentee bids prior to the sale. I advise against waiting until the day of the sale. The reason why is because so much of the business is done as absentee bids, and when you're giving absentee bids, the first bid even wins, and so it's a time-sensitive sort of a thing. So if you get your bids in first, then you have a better chance of winning. Typically, the low estimate is not the price that something sells for if The buyers are sensible though. They'll bid They'll put in bids that are that are slightly above that Usually the reserve is set one increment below the low estimate So if you want to cover a lot and just get it at the reserve You can more or less figure that it one bid increment below the low estimate is where that's gonna be. But typically people will put in absentee bids at the low or at one increment above the low. Although with some categories, categories that are really hot, burgundy for example, you typically have to be willing to go to the high estimate to ensure that you get it. If you put in bids that sort of mid estimate with the, for a popular wine, it's very seldom that you're going to be successful. And so I think the important thing is to know a little bit about the market, the type of wine that you want to collect, and have an understanding of where you need to go to be successful on that. So right now, Burgundy is very popular. Bordeaux is less popular. In the sale that I went to last week, I had clients who were very successful at the mid-estimate buying very nice Bordeaux's like 82 Margot and 75 La Mission Obrión and some very nice cases of wine and they didn't have to pay above the bid whereas I had guys buying Burgundy that were bidding up to the high and getting outbid. And some sort of unfashionable wines like the Port or Chauterne or things that are not as trendy these days, you can easily bid what you think the reserve might be, so one below and often you'll be able to get it because there isn't so much interest.

Yule Georgieva: You know, I hesitate to say this because I don't want to create more demand. I said to my own detriment that I love Soterra and it's such a boggling thing to me that it's really never captured the market in that way, right? Bordeaux definitely had its moment now, as you say, it's kind of come down a bit. Burgundy is in its trajectory, I think so is Barolo. But Sotarinet has never really seemed to have its moment, which works out for the likes of us, right? But it is kind of an oddity.

Charles Curtis: But there are people who specialize in Suite 1x and Zanbac, seen some big collections of Sotarinet. One of the biggest lots I ever sold when I was at Christie's was a collection of E. Kevin from 1811 to 1995, I think it was. It was almost complete unbroken vertical except for the vintages that they didn't make. And that went for over a million US back then, which that was a while ago now. But there's definitely specialists that seek that sub out, but as long as they're not in the sale room, you're right, you have a decent chance of getting a soterran at a good price.

Yule Georgieva: Wow, that sounds like quite the vertical and quite the sale. So kudos to whoever picked that one up. But, wine's in there. Okay, so if you're the buyer, as you say, it's a good idea to try to place an absentee bid. And depending on where the market is at for the given wines that you want, place your bids either at the low end of the range that is set or at the upper end, if it's something like a Burgundy or like a Giacomo Conterno Barolo or something that's really sexy right now. And then what happens when you actually win, right? Like if your bid is the highest, because I think there's some terms here and some conditions that are a little confusing for people. So can you explain hammer price, buyer's premium, some of these things that people would have to deal with?

Charles Curtis: Sure. So the best thing to do is put in the bid that's as high as you're willing to pay. You won't always get charged that. So if you get charged the lowest price over the last guy, so for example, if you really wanted that case of 1996 Coste Estenel, for example, and you put in a bid of $2,600 and the low estimate was $1,800, and say you had guys at the low and one above the low, which would be $1,900, but there was nobody after that, then you would get it for $2,000, which is the next, you wouldn't get charged the full $2,600 that you put in, because they're required to, well, to not do that. Essentially that would be stealing from you. So you would get it, the hammer price in that instance would be $2,000, but you'd get charged a buyer's premium. Most of the houses are 24.5% buyer's premium. That's pretty standard across the board, except HGH is still 19.5. So they have a slightly lower buyer's premium. The buyer's premium used to be much lower in the UK and they've gradually come up to the global standard and Hong Kong, it was always pretty much the same. But the important thing to do is whatever option you're considering bidding in, you should definitely look in the back of the catalog, figure out what the buyer's premium is. What I do is I set up an Excel spreadsheet and then I punch in a formula that has the hammer price, has the premium and has the sales tax. It used to be that if you bought it in a jurisdiction other or shifted to a jurisdiction other than the one where the sale was, you didn't pay sales tax. Those were the good old days. Now they're collecting sales tax on everything. So if it's a New York sale, you're going to get charged in most cases, New York sales tax. So 8.87% Hong Kong, you don't pay tax. The UK, if it's in bond, you don't pay tax, but you do pay tax if it's not in bond. So you have to look at each jurisdiction carefully. Geneva is different, Paris is different, so you need to understand. But in the U.S., figure you're going to pay a sales tax on the lot and factor that into the final price. And you know, a handy thing that I do when I put in my little spreadsheet together is I come up with an aggregate total that includes the buyer's premium and includes the sales tax and then I get a bottle cost and then I divide the bottle cost by the number of milliliters and then I have a column on the side that has the price per milliliter and it's a really easy way to compare the different wines and see what's cheap and what's not cheap.

Yule Georgieva: Oh, that's true because you can't do it by bottle because you might have some large formats in there.

Charles Curtis: Right, exactly.

Yule Georgieva: Ah, interesting. Interesting. So, question for you. Do you find that even with variations in buyers premium, it all comes out in the wash, to your point about it being a global market. Like, let's say there's a buyer's premium of 17.5% in, I don't know, Geneva, but they offer free shipping. And then you're buying at Acker in New York at the 24.5%. Would those same wines under those conditions ultimately end up being about the same or would you find it being cheaper to do the Geneva option with the lower buyer's premium?

Charles Curtis: It really depends. I find right now that London prices are somewhat depressed and sterling is cheap, so I think buying in London, if you're buying in Bonn, is probably the best way to get a deal. But I think in general, you have to look at it as the cost of doing business. The most important thing is to minimize the friction at every point that you possibly can. So you want to minimize all of the costs at every moment, but that doesn't mean you want to cheap out. I mean, you have to, it should be properly insured, it should be shipped safely, it should be professionally stored, or at least my wine is all professionally stored. It's what I recommend for people. It gives you a trail of provenance that you can document for the entire life of the woman and you're insured that it's being kept at proper condition. So all of those things are important to spend money on, but you don't want to spend too much money. That's why it's essential that you bid with discipline. Decide where you need to be, decide what you're willing to pay, and then don't go above it. That's where auction houses get you. It's when you get sucked into buying in the room and you add several blasts. Why do you like, oh gosh, I really want that. It's one increment, it's two increments. Each increment is about 10%. See, I think you need to draw the line, put in your bid. It's a good idea to go to the sale because then you can get a handle on what the market's doing and how many bidders there were, how enthusiastic it was, how much competition there was, what are the categories people are buying. All of that stuff is very useful to know. But it's best to have your bids and to stick with them. And to only stick that paddle up it, there's something that absolutely nobody's bidding on that you hadn't really thought of, but you can get it at the reserve, and why not? Wine is good.

Yule Georgieva: That's great advice. You know, I hadn't thought about that. The nice environment, you know, some food and a couple glasses of wine, that probably does point people towards raising their paddle a bit more often, which brings us back to your original advice, which is to put in your bids in the absentee process, because then at least you've committed yourself in a sober and rational state. 

Charles Curtis: Right, exactly. You don't increase them in the cell room, that's a bad idea. Then you're bidding against yourself.

Yule Georgieva: Yeah, true. We need to, everyone would need somebody like you there to pull on their sleeve when it's getting carried away. So let's just finish up on auctions. Can you just give us a kind of picture of what's really hot right now? I mean, you mentioned burgundy, but what's really capturing the attention of the market right now in auctions? What is something that maybe is of good value at this point?

Charles Curtis: So I think burgundy is the hottest category, both red and white. I think champagne is also pretty hot. I find in general that New World wines, including the ones from California, tend to lag behind in interest and that can tend to be a buying opportunity. And I also find that Bordeaux is relatively cheap compared to what it's been historically. Bordeaux really is, even today, is still 60% of the market. It used to be 80% of the market and they've lost market share, but it's definitely it's got to come back It's the bulk of the market. And so I think you can often find very good values in Ordo particularly in large format Ordo which doesn't seem to be Selling at a premium and when I first got interested in the auction market that is sort of mid 90s in New York There was a huge premium for large format bottles and people were really chasing them. I personally like to drink large format bottles because I'm a very thirsty guy. So, you know, mostly what I buy is the double magnum or Jervon's if it's Bergevie, you know, and I think that's easy to finish with, you know, one or two other couples. It's absolutely not a problem to drink a three liter bottle. And you know what they say about magnums, a magnum is the perfect size for dinner for two, particularly when one's wife isn't drinking. So I think large formats are the way to go. And you can get large format Bordeaux's for almost no markup, so I think now is the time to buy it.

Yule Georgieva: Well, you know, you say you're thirsty, but I would say you're just doing research, Charles.

Charles Curtis: Exactly. It's my professional application. You've passed your MW, but you're just a student for life. That's it. Never stop learning.

Yule Georgieva: Oh, that's fantastic. Okay. Well, you know what? That's been a great overview of options, but let's dive in a little bit to the authentication side, because I think this is to your point. You said this was only one piece of the puzzle, but I think it is one that people are a little curious about, and I think some people are quite worried about with respect to buying on option, because they're never sure of how to tell if something is authentic or not. And I think many people have seen the movie Sour Grapes about Rudy Cunio and that whole scandal with Acker. So how big of a problem is counterfeit wine in your experience?

Charles Curtis: I think it's still an issue, but it's less of an issue than it used to be. I think there are still people out there making counterfeit bottles of wine, which seems to be a problem in some categories more than other categories. Really the very best advice is don't chase uniforms. You know, I think it's people that insist on getting the rarest, most expensive bottles of wine are the ones that typically are most exposed to that sort of problem if you're buying it. So what I think of as sort of regular wine, that's not going to be an issue.

Yule Georgieva: Oh, so you're thinking like, I think in that, in the Sour Grapes movie, some of the Thomas Jefferson wines for instance From his personal collection. Those were ones that had been counterfeited So things like that that are going to fetch a very high price Are very rare and difficult to you know, prove their their provenance and their whole carfax report so to speak but if you're just buying Well, I hate to call it run of the mill but a 1982 margot, which you mentioned earlier There's enough of that out there and it's common enough that people might not be taking it. 

Charles Curtis: Right, exactly. Exactly. That's what I think. You know, if you go for those sort of legendary once in a lifetime kind of bottles, you have to be very, very careful. You know, normally, something for example like 47 Cheval Blanc. I'd pour to get the 47 Cheval Blanc, but not so many people do. And it's the last thing that I would buy at a sale. And sometimes even younger wines than that, like 61 La Fleur Petrus or, you know, there's different things that are sort of, either somebody once said that it was the greatest wine they ever had or the greatest wine ever made or something stupid like that and it sets off a furor, you know, there's like 45 for example, or for that matter, 61 Wootung. Those are, often you have to look at them really carefully. And so typically what I advise my clients is, number one, don't buy that kind of one. You don't really need it. And if you want to drink a bottle of it, then just invite me to dinner and I'll find one that's right for you. But tell them, but to the- A very large format one, I might add.

Yule Georgieva: A very large format one, the two of you.

Charles Curtis: No, but not all formats are even, there's even more risk of wine being gone. So I think you really have to proceed with caution. One of the easiest things you can do is make sure the wine is in its original package. So an original wood case, or original carton, if that's the way it was packaged. For example, even some like, like Ruby and Dujak are in the carton, and the Cochderie is in carton. So, you know, if it's in original wood or original carton, then there's a better chance that you're not going to have any issues with it. And that's the first step is to select what you're buying properly and look for the conditions. And once you've done that, and you've isolated a few things that might be interesting then just ring up the auction house and talk to them because you know they're salesmen, they want people who are interested and if you start asking questions, they'll figure you're interested and usually my experience anyhow is that they won't outright lie to you, nobody's going to say, oh yeah from here and it was kept this way or whatever if they don't know. But you can tell sometimes if they're prevaricating a little bit, if they're saying, oh, well, you know, then maybe you wanna consider a different lot. But if you just call them up, the auction houses have the head of department and there's always a bunch of specialists. So often your call will get routed to a specialist. And it's good to know a specialist. And then you can say, oh, yeah, you guys are having a sale next week. What do you think of lot 52 and they'll say 52 looks amazing I packed up the seller myself it was you know they can tell you a little bit about it give you a little color commentary if you feel comfortable then go ahead and bid you know and if you really if it's a very high value lot then you can ask for photos you can't really the nitty-gritty of authentication you can't do she can't like look at a photo it's very rare anyhow nowadays because the camera footage have gotten very good. So it's very rare that you can look at a photo and spot something from a photo. But you can see what condition it's in. You can tell how it's been cared for. And usually, 99% of the case, that's enough. And then if it's something really expensive, then you'd probably want to hire somebody with experience to go look at it with a, you have a 80X microscope and black light and all that stuff and that's really involved. But if you're somebody spending, say north of a quarter million dollars on a lot or something then you might invest in that. So it's a relatively small investment but it gets up to that point. There was a, there was one time where there was a private sale of some large format DRC that a client of mine wanted to buy. It was in a cellar in Burgundy and he wanted me to go look at it. So I went to look at it and I looked at it and the wax looked really funny. The wax on the bottles was the wrong color and some of the wax was dripping down the side. DRC never does that with the wax. I mean, the wax is always pristine and it's a very specific shade. This was obviously not done at the domain. So I called my guy up and I said, don't buy it because it doesn't look right. So he went to the vendor and said, now my guy says it's not right. He said the wax is the wrong color and it's been applied poorly and we don't want it. And the vendor said, well, I have an invoice. So he shows me the invoice and it's an invoice from the Italian importer. The Italian importer back in the day was Gaia. And I happen to know the Gaia's and so, you know, I texted them and I said, I saw this invoice and there's these bottles and they don't look right because the wax is funny and can you advise? So I mean, I went about my business. I was in Burgundy having a very nice time and all of a sudden late that afternoon my phone rings and there's a guy on the other end. He says, Charles, this is Angelo. I said, Mr. Guy, how are you? He said, I'm good. He said, that white is probably okay. And I said, yeah, but the wax, it looks horrible. He says, well, you know, sometimes the wax, it breaks. So I had to fix. I said, what do you mean you had to fix? He said, I get some wax and melt it down and I wax it myself in the warehouse. And I said, you re-wax the DRC in your warehouse. He said, Charles, this was 1987. Nobody thought about this back then. And I said, okay, well, you know, if you say so, then I'm going to believe you because you're the importer of record and I'll tell my guy to buy." So we hung up, I told my guy to buy it, but what I said is, you can buy the wine after the call from a fellow guy. I believe it's authentic, but I don't think he'd ever be able to sell it because he could never convince anybody else of the story. And he said, well, Charles, I wasn't going to sell it, I was going to drink it. So he bought it and actually most of it I think he's already consumed. So it all worked out in the end. But those are the kinds of things that you have to look for, and those are the kind of situations that you can run up against. That's a great story. And this is part and parcel of why I think people are well advised if they're buying in larger quantities or larger amounts to have somebody like you.

Yule Georgieva: Because very few of us have Angela Gaia on speed dial.

Charles Curtis: It happened that I had just done an event with, at the time I was a consultant for Coravin, and we had just done an event with Gaia Gaia and Coravin, and it was actually Gaia that called me up and put her dad on and said, this is what I think. It all worked out okay in the end. Then some of the other more prosaic things, you have to look at, I mentioned those ADX microscopes, they're actually these things that hook onto your bone that alight and they magnify it and you can easily tell, for example, if something's been done at an inkjet printer, which you can't tell from a photograph because you have to look for the pixelated letters and the way the inkjet has applied the ink onto the the label, everything has to be appropriate. The capsule, the material the capsule is made from, the paper, the glass itself, and to get to that granular level, you really have to go in person and look at it. So, usually if it's something very high value, my clients will send me and I'll look at it before the sale and tell them whether to bid or not. But what people don't realize is that if you buy a white at auction and somebody looks at it afterwards and doesn't think it's right, it's relatively easy to clear up. If I go look at a lot that my guy bought in Hong Kong, I only go to Hong Kong, well, I don't know if you saw it, but they just lifted the travel restrictions, so I'm probably going in January, but my guys will buy and I'll go once a year or twice a year, look at the stuff they bought and almost never are there issues, but occasionally there's issues. And so I just have them write to the auction house they bought it from and say, Charles has questions about this, what do you think? And they say, invariably, we don't agree with you, but we'll take it back because you're a good client and we don't want you to be unhappy. And in almost every case that I've ever done, that's been enough just to say, I had a guy look at it up close, he doesn't like it, they take it back, they refund the money, it's not a problem. There's been one or two times, not with option houses, but with private merchants where they've argued. And then I write up a very lengthy report with the photographs and state very explicitly why I think it's incorrect. And then I advise my client to take legal action. And when they get that letter with the report, then they say, we think you're totally wrong, but we're gonna give you your money back because we don't want to go to court. And that's all it's ever taken in 10 years of doing it. I've never had anybody actually go to court. The people who sold the wine that I consider to be dodgy have always refunded them. Sometimes it just takes more prodding than other times.

Yule Georgieva: Good to know. So there's not really a caveat emptor where you're completely on the hook if you buy something which turns out to be incorrect or flawed.

Charles Curtis: So it is technically that's stated in the terms and conditions of all the auction houses and most of the merchants as well. That's definitely in there, but they very seldom, you know, if you're a good client, they'll bend the rules for you. If you insist and if you hire somebody who knows what they're talking about, then they don't want trouble, they don't want bad publicity, they don't want a lawsuit, because then once the lawyers get involved, then it all goes to hell. So it's in everybody's interest to avoid that, and typically that's the way it works.

Yule Georgieva: Yeah, interesting. Well, so as a final point here, because I know we're running out of time and there's so much more we could go over and we're going to have to, I think, do a follow-up episode with you, but let's just talk about valuation and determining the quality of different wines that come to you, right? Because a 1961 Mouton versus a 45 Mouton, depending on how it looks, the state of the bottle and all of that, that can really affect the valuation as I understand it. So how do you determine the fair market value of wines? What sources are you looking to and then what qualities of the bottle itself would come into play there?

Charles Curtis: Sure. The first thing I should specify is that there's three types of value that are important. Retail replacement value, fair market value, and marketable cash value. Retail replacement value is what you'd have to pay at a store. That's usually used for insurance purposes, so if you're insuring your wine, you should be thinking about what it would cost to replace it at retail. There's fair market value, which is what it would cost you in the most common market, so typically for collectible wine, that's the auction market. So that would be the hammer price plus the premium. And the other type of value that's important to consider is marketable cash value, which is what you would get if you sold it, which that is essentially the hammer price without the premium. So fair market value is what it's going to cost you to buy it with all of these and other expenses included in it, but not taxes. So that's essentially hammer plus premium in this situation. is to figure out the fair market value if the condition is appropriate to age. So in other words, if it looks the way it's supposed to look, because a bottle that's 30 years old is going to look different than a bottle that's 50 years old, that's just the normal course of the world. So if it's appropriate for age, then it should be X. And I just take that as being the average of all the prices. Now the tool that you use for retail prices is winesearcher.com and the tool that you use for auction prices is winemarketjournal.com. They're both paid subscription. It's important to pay for wine searcher because otherwise you're only getting the merchants that pay them a marketing fee. So sign up, pay the fees and then winemarketjournal.com, it's not expensive, it has every auction price since the dirt was young. And you can do the research you need to do and figure out what the price of 82 Muton should be, for example, with a premium, without a premium. So you know what it should be worth. And then if you find wine that's not in pristine condition or it's not in condition appropriate for age, because 82 Muton, just to use that for an example, you would expect a slightly benzoil label, you would expect the level to be down a little bit. So when a wine like 82 Muton, for example, is bottled, the level of the wine, which is called the eulet, is into the neck. By the time it's 20 years old, it might be closer to the base of the neck. By the time it's 30 years old it might be just at the very top of the shoulder or the high shoulder. By the time it's 50 years old it might be a little bit lower than that. And if it gets to it's shoulder I would say don't buy it. No matter how old it is because there you have a risk of oxidation. But that's kind of par for the course. Then there's the cosmetics, which I don't really, if I'm buying drinkers, I don't really care about the cosmetics. If I'm buying to resell, then it's, it'd be thought of as very important. So, so take all those things into consideration. Usually if it's in slightly less than condition appropriate for age, then I'd knock off one auction increment, which I figure is like 10% of the price. And if it's in really dinged up condition, then I'll knock off two increments, which is like 20% of the price. And if it's worse than that, like mid-shoulder levels or ripped labels or really sides of the seat bench, I hate sides of the seat bench, it means something's wrong with the court, then I just say exercise discipline and just don't buy it. So I mean, ultimately everyone has a different tolerance, but as long as you stick with the rules that I laid out and you're buying wine in original packaging, wine that's in condition appropriate for age and wine from a source where you feel good about the provenance, whether or not they've told you exactly where it's proven as long as you feel comfortable with the answers that you've received, then you can probably go ahead and buy it. And that's how I tell people to do it.

Yule Georgieva: So that's very interesting about the Eulage. First of all, my name being Eula, I've always liked the word Eulage, but I won't start charging royalties on it. For a wine that's older, let's say that 45 Mouton, so you said you would expect the Eulage to be quite a bit lower than say top, top of, or maybe even like into the neck. If you do find a bottle that is into the neck, would that be a sign of concern for you that perhaps somebody has must have out there because you would expect it to be lower?

Charles Curtis: If it's, you know, it depends on the age. I think, while from the 80s you can still get levels into the neck sometimes, usually for like 82s you'd expect them to be base of the neck. In the 70s you'd expect to be slightly below the base of the neck. And if you saw something from the 70s or the 60s and it was into the neck, then yeah, it might be cause for concern. But that's when you have to look at it in person because you need to look at the color too. The color is very important. And if it's like a dark color into the neck and it's a 61, then I'd totally stay away from that, wouldn't touch it with a dip or a pull. But those are the kinds of things that you have to look at in person. All of the auction houses, by the way, will let you inspect wine if you want to look at a lot prior to the sale. You have to go to their warehouse, but they'll pull it for you, open it up, you can look at it, take photographs. But usually, just working off the photographs they send you and conversations with the specialist is going to be enough to reassure you. And then it's your personal tolerance. You know, I buy wine all the time that's dinged up if I get a discount on it because I figure if I'm going to drink it, it doesn't really matter. I've bought whole cellars from people who stored it in natural cellars, in other words, without temperature control, underground. Most of them have been perfectly fine. Every once in a while, there's one you pour down the drain, but I'm tolerant when it comes to that. I love to drink old wine. So there you have it.

Yule Georgieva: There you have it. Well, before we round out, I promised that we were going to get your thoughts on any wines that you've had recently that have really been bangers or anything that you're particularly keen on these days or you've been personally buying on auction. So what would be your top few bottles in the cellar of Charles, courtesy of late?

Charles Curtis: Lately I did have some really smoking wine. I had a bottle, I think I mentioned it earlier actually, the 75 Lemission Obrion. I think Obrion and Lemission Obrion from the 70s is absolutely brilliant and it's not so expensive. 78, 76, 75, 70, some of those wines can be absolutely amazing. Recently, I also had some Dujac from the 90s. I had the 93 Clos de la Roche and the 96 Bon Mar. Those were really good. I recently did a big vertical of Ponceau Clos de la Roche, which just completely blew me away. We went from 2019 was the youngest and 1934 was the oldest. And there were some sweet spots in there, definitely.

Yule Georgieva: Wow, that's quite the vertical again there. But like you said, you're thirsty, so you're a more thirsty guy, I feel. Charles, this has been a great conversation. I'm excited to do another follow on here. I'm sure we're gonna get lots of questions on this. But thank you again so much for joining us and for sharing all of your knowledge.

Charles Curtis: This was really fun. This was really fun. My pleasure, happy to do it, we'll do it again.