Under the hammer

Restaurateurs don't usually go into the wine maturing business. Their job is to sell the (hopefully) mature wine to customers, supplied by a wine merchant or wine broker. But as all on-service operations take a healthy margin from alcohol sales, with up to five times the purchase price to the ritziest places, it pays to invest some time in the subject of fine wine supply.

Buying wine at auction may sound like certain disaster if you haven't done it before, but it need not be if you are careful. Most wine merchants would not like it to be known that much of the older vintage, mature wine they sell to the restaurant trade and the public was bought by themselves at auction. Buying wine already matured is also the only option for those restaurateurs without the space to keep it themselves.

The American experience

Master of Wine Serena Sutcliffe, head of Sotheby's wine department, has noticed that restaurateurs in the USA are more in evidence buying at auction. "I think more British restaurateurs should try it. Perhaps in the USA there is less mystique attached to buying at auction, so people just get on with it. It makes perfect sense and takes up very little time because you just fax in your bids, tick the box to have it delivered if you want, and wait to see if you get it."

Sotheby's receives more faxed bids for its wine sales than for any other type of sale. The wine sold at auction could have come from a variety of sources, but not all of it will show a profit to the person who bought it originally, and you are now paying him or her for maturing the wine.

Some wines are even sold at auction for less than they were sold for several years earlier. Examples of this are some of the 1988 Burgundies, red and white, both drinkable now, and another is 1987 Bordeaux. "1987 was an ‘off' year", says Sutcliffe, "but in this case meaning that it is not great wine worth keeping for 15 years. Most of these are accessible and drinking very well now. They are an affordable way to put such great names as Latour, Margaux and Mouton-Rothschild on your wine list."

Another way to make auctions pay is by picking up cheap vintage port. Sutcliffe recommends Dow 1977 as being the best value, at about £200 a case, which works out at about £3 a glass - she has succumbed to the sight of vintage port in a glass decanter in a restaurant. These days, few customers are going to drink their way through a whole bottle of vintage port, but a glass is a real treat and not widely available. The Lanesborough hotel in London buys very old vintage Cognacs that are served with great ceremony under the title "liquid history".

At wine auctions, there are pre-sale tastings if there is a large lot of a particular wine. Wine auctions are also flexible. If, for example, there are four lots each containing two cases of the same wine, you can fax in your bid for any one of those lots at the price you want.

Auction advice

A few hotels and restaurants already buy wine at auction. Neville Blech of London's Mijanou restaurant used to buy wine at auction when he was a hands-on restaurateur. Now he concentrates on his wine merchant business. He says: "You will definitely save money by buying at auction, rather than buying from a broker or a merchant, but you have to follow prices very closely."

He advocates undertaking sound research. "With the brokers, you are getting a service and if you buy a dud you will get their support. You won't at auction. They are not for those who need just a few bottles of decent claret; auctions are for buying by the case. Done well, however, you can make substantial savings if you do your homework."

Keeping track of prices is straightforward. Wine magazines Decanter and Wine both publish prices for quality wines, while the Decanter Index tracks the movement of the fine wine market just like the FTSE tracks the London Stock Exchange.

Don't feel shy about telephoning Christie's or Sotheby's to ask what a lot might go for or to ask them advice about what wine is good value at what price; they are there to help you buy.

The auction houses' wine departments also tend to be a lot more approachable than their fine art departments.

Also remember to always read the catalogue, as the wine could be "lying" (located) in "auctioneer's custody" (in their wine storage facilities) and these could be anywhere in the country. Additional transport costs might then have to be paid.

Buying at auction is probably not worth doing on an occasional basis as the initial investment of time needed would not make it worth while. But for the right operation and done well, it can be both profitable and fun, and there are not many things in this world that are both.

Where to go and when

The two biggest auction houses, Christie's and Sotheby's, both based in London, started in 1766 and 1744 respectively and have always held mixed wine and household effects sales.

Christie's (0171-389 2721) is the biggest, holding 22 sales a year at its King Street site, always on a Thursday, and 11 a year at the smaller South Kensington branch (0171-321 3002), on Mondays.

Sotheby's (0171-314 4423) holds 11 sales a year in New Bond Street, always on a Wednesday, and holds other sales around the country. Telephone for a calendar of sales.

Buying in person at auction should be treated as work, not pleasure. The undeniable excitement is certainly a feature, but do not let it affect the wines you want to buy or what you pay for them.

Never pay more than the price that will give you the profit you need. Write that maximum price on the page beside the lot in the catalogue before you go in to the auction room - and stick to it. If the price goes over that, well, you will just have to try at the next auction.