Langton's Whinge

[rooman]

If people look at the latest auction results posted by Langtons, by my calculation 60-70% of the lots were passed in which means the reserve prices were set too high. https://www.langtons.com.au/auction-results

If the business was still independently owned, there is no way management would allow the pass in percentage to be this high. Foreign auction houses target 90% or more since no one gets paid if there are no sales.

Whilst Woolworths has done a better job recently making the site more user friendly, it still owns the auction house for reasons other than simply making money from sales and buying commissions.

[Sean]

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[Mahmoud Ali]

Well then, it's basically retail and buyer beware!!

Mahmoud.

[Ian S]

I wonder how long before Dan Murphy's own label wines make the Langton's Australian wine classification

[Polymer]

I get why people might feel like there is something underhanded going on..and possibly there is...but it just isn't worth it for them to do that..the cost to their business would be huge..and any audit would easily show what is going on..

Their business model, without doing anything stupid, gets them nearly 30% of their revenue without taking any risks. They don't have to pay for stock, other people have already paid for it. All they provide is a website and a place to store the stuff while it is being auctioned.

Polymer et al,

I think you guys are assuming too much that Langton’s is just an auction house.

Most of the discussion so far seems to be on the basis of how it operates for private vendors and private buyers - like yourselves.

But this is only part of the story. Since Langton’s was bought by Woolworths, it has become a “de facto” retail business too. A quick look at their site suggests you can buy new vintages of wine there, incl. en primeur and pre-release, as well as aged wine.

At the same time, Dan Murphy’s has turned Langton’s into its auction arm in the way they clear stock and sell aged wines. Whether that will be the bulk of their sales of aged wine, time will tell.

This is a growing part of their business, especially with wine they know they will get better margins on via the secondary market rather than in their stores.

The next step to this is their online business, which will be growing exponentially compared with their bricks and mortar business. Have you noticed when you go into their newly renovated stores lately there’s less stock - or less real wine labels and more of their own private labels?

It would be interesting to know how much of Langton’s business these days is private vendors and how much is Woolworths business.

At the same time, if you want to buy aged wine on the Dan Murphy’s site one of the options is Langton’s. Conveniently they have a link to that site.

Online retailing is where the future is. More and more wine will be sold online either directly, in partnerships (they call this “Connections”) or by auction, the latter having its own very particular (and high-spending) customer profile.

So of course, they are selling Dan Murphy’s (or other Woolworths-owned) stock through Langton’s and protecting margins via vendor bids. From a legal standpoint, Langton’s is acting as a separate entity because it is just handling the stock when it passes through their hands.

The reality is Langton’s is also another arm of Woolworths retailing.

My apology for mentioning names. It is difficult to talk about this without doing that.

I realize that...but none of that changes anything...in fact, it means there is even more risk to do something so stupid..

I don't think you realize they don't have to protect margins with Vendor bids..that's what a reserve is for...You cannot make a vendor bid when there isn't a reserve..a vendor bid is just a way to get things moving, it isn't a way to boost the actual price.

I get why people think there is some shady stuff going on here..but frankly, they'd be stupid to even attempt to do something like this...so easy to catch through an audit...Reserves protect whatever price they want for the wine...There is no requirement to sell your wines in an unreserved fashion and if you had enough stock and sold through them and had half a brain you'd know what to sell in that auction....

[Sean]

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[Madanie7]

it means there is even more risk to do something so stupid..

They have a track record of stupid business decisions...Masters comes to mind.

[Barney]

it means there is even more risk to do something so stupid..

They have a track record of stupid business decisions...Masters comes to mind.

No sure the decision was bad in itself however was just poorly executed in implementation...as is the case with Langtons

[Madanie7]

it means there is even more risk to do something so stupid..

They have a track record of stupid business decisions...Masters comes to mind.

No sure the decision was bad in itself however was just poorly executed in implementation...as is the case with Langtons

Yeh, fair point.

[Polymer]

Not sure why you keep insisting that other people are saying they might be being “shady”. If you mean breaking the rules I didn’t say that, in fact if you read my last paragraph I say why they would not be doing that.

Because most people in this very thread seem to suggest Langtons is shill bidding..maybe they are....but I don't think the fact that many items will often end up around the same price in the same auction means that is the case...

I'm also not saying shill bidding at Langtons is not happening..but if it is, it is likely from their vendors (not associated with Langtons). I'm not even saying Langtons wouldn't be aware of shill bidding or wouldn't be suspecting but are just not investigating it (Ebay for example turns a blind eye to some of this).

But there is no reason for Langtons itself to get into that..even for stock from associated companies...just too much risk, too little benefit, too easy to audit..

[Sean]

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[Bobthebuilder]

Not sure why you keep insisting that other people are saying they might be being “shady”. If you mean breaking the rules I didn’t say that, in fact if you read my last paragraph I say why they would not be doing that.

Because most people in this very thread seem to suggest Langtons is shill bidding..maybe they are....but I don't think the fact that many items will often end up around the same price in the same auction means that is the case...

I'm also not saying shill bidding at Langtons is not happening..but if it is, it is likely from their vendors (not associated with Langtons). I'm not even saying Langtons wouldn't be aware of shill bidding or wouldn't be suspecting but are just not investigating it (Ebay for example turns a blind eye to some of this).

But there is no reason for Langtons itself to get into that..even for stock from associated companies...just too much risk, too little benefit, too easy to audit..

Kev
Not around the same price, the exact same price for extended periods mid auction. And all of a sudden, from 2 bucks to 40 on 10 lots in a row, 2 days before auction closes
You need to bear in mind the psychology tactics Woolworths apply to the supermarket shelves to understand why they would
Attempt this, and the disclaimers posted earlier in this thread. Why would you even think of posting a disclaimer like that? I tell you why, because you intend on doing it!
I would bet my entire cellar and my left hand (I'm left handed) they are dummy bidding in that reserved auction
I use to dummy bid for high end properties for exclusive real estate agents back in the late 90's for my beer money
I can smell an auction rat from a mile away

[Ian S]

As an industry, it is generally important to think the worst of auction houses (and living vendors), and then risk occasional pleasant surprises. The auction scene has a long history of dodgy dealing. e.g. ever seen a bottle with the part of the vintage ripped off and the text says "vintage unknown, believed to be 1982", when in fact it's a 1981 but a careful rip can conceal this, the illusion enhanced by lotting it with genuine 1982s. Such acts occur and the wording absolves them of the problem - the buyer was not told it was a 1982, it was up to them to make a judgement on whether it was or wasn't.

[Alan Foo]

As an industry, it is generally important to think the worst of auction houses (and living vendors), and then risk occasional pleasant surprises. The auction scene has a long history of dodgy dealing. e.g. ever seen a bottle with the part of the vintage ripped off and the text says "vintage unknown, believed to be 1982", when in fact it's a 1981 but a careful rip can conceal this, the illusion enhanced by lotting it with genuine 1982s. Such acts occur and the wording absolves them of the problem - the buyer was not told it was a 1982, it was up to them to make a judgement on whether it was or wasn't.

I have seen too many of these happening........................

[Polymer]

Kev
Not around the same price, the exact same price for extended periods mid auction. And all of a sudden, from 2 bucks to 40 on 10 lots in a row, 2 days before auction closes
You need to bear in mind the psychology tactics Woolworths apply to the supermarket shelves to understand why they would
Attempt this, and the disclaimers posted earlier in this thread. Why would you even think of posting a disclaimer like that? I tell you why, because you intend on doing it!
I would bet my entire cellar and my left hand (I'm left handed) they are dummy bidding in that reserved auction
I use to dummy bid for high end properties for exclusive real estate agents back in the late 90's for my beer money
I can smell an auction rat from a mile away

I can tell you why..

Because if someone is bidding on 4 lots of 1 bottle, same wine.

They bid 25 dollars, their max. Auction lot 1, doesn't get the winning bid.
Auction lot 2, which is currently at 15, they bid 25, doesn't get the winning bid.
Etc, etc, etc.

You have the same person bidding on all of the lots for the same wine. And keep in mind, they vendor bid it up to the reserve. Eg. The reserve is 50 dollars, you've bid 40, the current winning bid is 41 (without an actual bidder) and it does this up to the reserve price. This isn't a shill bid, they're just bringing the price up to reserve. This is unlike ebay where you can bid and the bid never gets to reserve because there aren't enough bidders and even though you might have won the auction with your max, you don't win it (I don't think they've changed this).

You cannot put a disclaimer that allows you to break a law..same reason you can't write into a contract a clause that breaks the law...it doesn't matter what it says it doesn't protect you from anything...

[sjw_11]

You cannot put a disclaimer that allows you to break a law..same reason you can't write into a contract a clause that breaks the law...it doesn't matter what it says it doesn't protect you from anything...

While this is true, it equally seems unlikely that the lawyer who drafted the terms and conditions would include a term which they knew would have no impact.

A quick search confirms that the wording "advance the bidding at [their] absolute discretion" appears in the T&C's for a lot of auction houses.

Unlike auctions for real estate (which are highly regulated) and to a lesser degree motor vehicles, I think it is fair to say that auctions of mere chattels have always been more lightly regulated under the approach of caveat emptor.

You will see in Queensland, a chattel auctioneer must still be licensed but as far as I can ascertain this is not the case in NSW or Victoria- Langtons is required to have a liquor license but there is no specific registration as an auctioneer.

Fair Trading NSW themselves note:
"It is a case of ‘buyer beware’ as goods bought at auction are not covered by statutory warranties..."

When discussing the obligations of auctioneers they note only one:
"The auctioneer must not make misleading or deceptive representations about the goods."

http://www.fairtrading.nsw.gov.au/ftw/Consu ... tions.page

The Sale of Goods Act 1923 NSW, s60 makes the situation explicit:

(3) where a sale by auction is not notified in the conditions of sale to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid or to employ any person to bid at the sale, or for the auctioneer knowingly to take any bid from the seller or any such person: any sale contravening this rule may be treated as fraudulent by the buyer,

(4) a sale by auction may be notified in the conditions of sale to be subject to a reserved price, and a right to bid may also be reserved expressly by or on behalf of the seller,

(5) where a right to bid is expressly reserved, but not otherwise, the seller, or any one person on the seller's behalf, may bid at the auction.

While various proscriptions against false and misleading conduct could also apply, this clearly will not apply where the conditions of the auction explicitly tell you the price may be driven by a bid from the auctioneer themselves- you cannot be mislead by something you are clearly informed of.

So it seems that so long as the conditions of the auction make clear that there is a right to bid on behalf of the seller, then a bid by the auctioneer on behalf of the vendor would indeed perfectly legal for chattel auctions in NSW.

A bid by a false third party (a "shill bid") may still fall foul of being misleading conduct, however that is not what we are considering here.

[NB: this is an academic summary only and should not be taken as or relied on as legal advice]

[Polymer]

All of that falls under the fact that they'll raise the price when you bid, up to the reserve price. Which has already been discussed as legal as a vendor bid. They do this automatically in their auctions.

Generally the difference between a shill/dummy bid and a vendor bid is:

You can only have a vendor bid if there is a reserve.
It can only be up to the reserve.

Again, you can't disclaim against a dummy bid which is illegal..
You can disclose you are vendor bidding, which falls under all of the conditions of a vendor bid..

[Duncan Disorderly]

All of that falls under the fact that they'll raise the price when you bid, up to the reserve price. Which has already been discussed as legal as a vendor bid. They do this automatically in their auctions.

Generally the difference between a shill/dummy bid and a vendor bid is:

You can only have a vendor bid if there is a reserve.
It can only be up to the reserve.

Again, you can't disclaim against a dummy bid which is illegal..
You can disclose you are vendor bidding, which falls under all of the conditions of a vendor bid..

All fair points Polymer except my original post specified unreserved auctions... and I think that many are referring to them.

Interestingly this week Langton's seems to have departed from their recent format of a $5 reserve auction closing on a Thursday evening. Perhaps they've got sick of maintaining the ruse.

[sjw_11]

All of that falls under the fact that they'll raise the price when you bid, up to the reserve price. Which has already been discussed as legal as a vendor bid. They do this automatically in their auctions.

Generally the difference between a shill/dummy bid and a vendor bid is:

You can only have a vendor bid if there is a reserve.
It can only be up to the reserve.

Again, you can't disclaim against a dummy bid which is illegal..
You can disclose you are vendor bidding, which falls under all of the conditions of a vendor bid..

I read the Sale of Goods Act s60 as making two things allowed, provided they are notified in the terms and conditions:

1) Creating a reserve price;
2) Reserving a right for the vendor (or their agent) to place a bid;

My interpretation:

(3) where a sale by auction is not notified in the conditions of sale to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid or to employ any person to bid at the sale, or for the auctioneer knowingly to take any bid from the seller or any such person: any sale contravening this rule may be treated as fraudulent by the buyer, [if you notify in the conditions a right to bid on behalf of a seller, it is not unlawful]

(4) a sale by auction may be notified in the conditions of sale to be subject to a reserved price, and a right to bid may also be reserved expressly by or on behalf of the seller, [Your terms and conditions can allow for a reserve price AND ALSO you may reserve a right to bid on behalf of the seller]

(5) where a right to bid is expressly reserved, but not otherwise, the seller, or any one person on the seller's behalf, may bid at the auction. [Slightly redundant, as this is already established by ss60(2) and (3). As this clause makes no reference to a reserve price, my inference would be it exists to make clear that where you have expressly reserved the right for the seller or their agent to bid, then that is allowed with or without the existence of a reserve price]

Notably, there is no reference to the bidding being only up to the reserve price.. which again argues in favour of interpreting this section as creating two separate allowable actions: 1) not selling an item because it didn't get to the reserve and 2) placing vendor bids to get a higher price.

I will have a look to see if there is any case law on this...

[sjw_11]

Oh and the difference between a shill/dummy bid and a vendor bid is in the former the auctioneer pretends there is a legitimate third party bidding and in the latter they don't.

So in an eBay or Langton's context, a shill bid is where the vendor registers a fake second profile to bid. The auctioneer merely advancing the price forwards is a vendor bid in line with the auction terms and conditions.

[sjw_11]

One final thing to be very clear- this is a completely different legal position to what it would be with regards to the auctioning of real estate. That is covered by a separate Act- the Property, Stock and Business Agents Act 2002 (NSW).

In the context of auctioning real estate, only one vendor bid is allowed and it must be clearly identified. All real estate auctions must have a reserve price agreed in writing before the auction.

Dummy bids for real estate are illegal, with the only exception being the one allowable vendor bid made by the auctioneer and clearly announced as such.

It is an offence against the Property, Stock and Business Agents Act 2002 for a person to do any of the following:

(a) make a bid as the seller,
(b) make a bid on behalf of the seller (unless the person is the auctioneer),
(c) procure another person to make a bid on behalf of the seller.

http://www.fairtrading.nsw.gov.au/ftw/Prope ... tions.page

[Polymer]

So other than the auto bidding, where Langtons advances the bid up to the reserve (where it makes no difference) but it obvious they're advancing it as a vendor bid..

How are they notifying people when it is a vendor bid?

If all you have to do is say we can do it at anytime...then no offense to all Australians, but the law (govt entity) in this case is completely incompetent because basically you've allowed Dummy bids under the mask of a T&C...and while this falls perfectly under the AU consumer that gets screwed by overprotectionism and allowing single entities to control markets both vertically and horizontally, it completely goes against, what I think is a sense of fairness that Australians have...

Why bother even saying shill bidding is illegal because they've basically said it isn't for their own benefit (not others)...it is used only on their own stock or with their own sister companies which I have no idea how doesn't fall under a conflict of interest...

[swirler]

Until the reserve is met, all bids are meaningless!

[sjw_11]

If all you have to do is say we can do it at anytime...then no offense to all Australians, but the law (govt entity) in this case is completely incompetent because basically you've allowed Dummy bids under the mask of a T&C...and while this falls perfectly under the AU consumer that gets screwed by overprotectionism and allowing single entities to control markets both vertically and horizontally, it completely goes against, what I think is a sense of fairness that Australians have...

https://www.youtube.com/watch?v=gls09kO-8DE


My point is, no one (i.e. no law or court) has said dummy bids are illegal (except in the specific case of real estate auctions).

The underlying philosophy is based on the fact that you have your own agency to determine what price you will bid. If you decide you will bid $20- no one is forcing you to pay that. If the vendor moves it along to that price and supplies the goods promised in the promised condition so be it.

If you decide to pay $20- and the vendor moves the price to $21- then you do not buy it and the vendor perhaps misses out and must try to auction it again.

Thus, the focus of the law is on the description of the product and delivering clean title. So if you are happy to pay $20- for a purple vase and instead you are delivered a taupe cup, or indeed an empty box, you would have a legal protection to avail yourself of.

If you are taking your own price and value discovery solely from the online bids lodged against you, tough luck. You should work out in advance what you will pay, and then pay no more than that. If you are mainly angry because you wanted an even bigger bargain ... well I want a lifetime free supply of coffee but sometimes you don't get what you want.

All of that said, on reflection, where I think it gets interesting is the angle that Langtons offer a "no reserve" auction, heavily promoted, implying items could sell for anything- $1! $2! Anything!
If they then engaged in vendor bidding then I think this would raise a very interesting argument of deception/misleading conduct, notwithstanding their terms and conditions. In that example, it would be the promotion of the "no reserve" element which would technically be the contravening conduct, not the vendor bidding per se.

[Emphasis on the IF they did such a thing. This should not be taken to assert any such behaviour has taken place and is purely hypothetical.]

[Polymer]

Ok..well if shill bidding is allowed in Australia that's really a bit of a shame...

And if it is allowed, then it is likely to be done...which is compounded by the fact that it is probably not an arms length transaction between Dan's and Langtons which means they're doing it on their own merchandise without risk....

It doesn't impact how I'd bid..I just bid my max and I either get it or not..but I do think the whole practice of shill bidding is unethical..it is a shame Australia can see that for Real Estate but isn't smart enough to apply that elsewhere...

[phillisc]

Oh l so miss the days of live auctions...could see the competition in the room...no phones and clearance rates of 95+ percent
Can't see how its more expensive to do and with consistently higher sales...they would actually make more money.
Cheers
Craig

[tarija]

Oh l so miss the days of live auctions...could see the competition in the room...no phones and clearance rates of 95+ percent
Can't see how its more expensive to do and with consistently higher sales...they would actually make more money.
Cheers
Craig

Surely only retirees have got time for live wine auctions nowadays!

[phillisc]

Oh l so miss the days of live auctions...could see the competition in the room...no phones and clearance rates of 95+ percent
Can't see how its more expensive to do and with consistently higher sales...they would actually make more money.
Cheers
Craig

Surely only retirees have got time for live wine auctions nowadays!

I just assumed that there would be plenty of cashed up east coasters who have made their millions by 35...and would be sitting in the back row whilst their agent up front was doing all the heavy lifting waving the paddle...ala Christies

Fucking retirement , that's 20 years away... but thanks...its the transparency that I am after at an auction...come out from the shadow of the firewall.

Cheers
Craig

[Hacker]

Well, I have a good Langton's story. Just recently I identified a shedload of stuff to sell, around 70 cases - very cartartic selling and not buying - and they picked the cases from home with no stress. Once the items were loaded on their website I reviewed the house reserves and in most cases I lowered them on the premis that when you find an item 'on sale' you are more inclined to bid more aggressively (a bit like home auctions). I also insisted that the starting price be $1 less than my reserve. I had to push for this as the 'old guard' at Langtons don't like this. Anyway I had an amazing 85% clearance rate. Apparently the normal auction average is around 35% and single vendor average around 45%.

[asajoseph]

Just been looking back through my Langtons purchases - it's a real mixed-bag. There's a few things where I've got a bit carried away & overbid on the odd bottle that I really want, but there's a few good bargains in there as well - a few halves of 2014 Doisy Daene, a magnum of Coppermine Road, a bottle of 2014 Clerc Milon at half the price I see it listed for elsewhere...

Not intending to brag about any of these - just mention that the bargains are out there if you have the patience & dedication to trawl through the site.

However... The volume that passes through the site is really astonishing, compared to similar sites that I used to use in the UK (though the secondary market there works very differently).