Auction Prices Take a Dip: The Atlantic Magazine surmises that recent declines in wine auction prices portend a possible wider contraction in the luxury goods market. Auction prices have reportedly taken a 23 percent dip this year, largely due to Chinese buying patterns, after a 264 increase since the end of 2003.
Ongoing Bordeaux Uncertainty: In related news, store owners are predicting further “pain ahead” even as Bordeaux producers continue to discount their vintages, according to this Decanter magazine report. Given the run up for high-end Bordeaux, this contraction is to be expected, but the ongoing softness from Asian markets remains a bit of a surprise, given their love affair with the French varietal.
Lot18 Tries to Keep Focus: the flash wine deal site Lot18 has let 11 employees go after expanding its business too quickly after raising $44.5 million in venture capital funding, according to this report. “One of the perils of having a lot of money is, it’s easy to launch a lot of things,” Founder and President Philip James told Betabeat. The food and travel businesses will be eliminated, according to the report.
Two Prong Strategy for Diageo: Alcohol conglomerate Diageo has its sights set on the so-called millennial consumer with the launch of three new wine brands, according to this report. The three new brands – Butterfly Kiss, Rose ‘n’ Blum, and Stark Raving – will all be priced in the $12 to $14 range and hope to sell 100,000 cases of each brand by the end of the year. Diageo professes to be focused on its “heritage” wine brands and its aforementioned “lifestyle” brands, part of a “two pronged” strategy in its wine business.