Ten years ago the price ratio of Lafite Rothschild to the
other First Growths (last ten physical vintages) was almost 1:1; it commanded just a 5% premium over Haut
Brion, Latour, Margaux and Mouton. From 2003 it was regularly the best
scoring First Growth, resulting in a surge of demand that saw its premium rise to
a level of 50%.

In 2009 Asian demand for Lafite
accelerated. The wine became a Chinese super brand, rocketing to a premium of
129% one month after it announced that the 2008 vintage was to carry the
Chinese symbol of the figure of eight (a symbol of good fortune) on the bottle.  There is a fair dose of irony in this as it
signalled the peak of Lafite’s premium, after which prices – and Lafite’s own
‘good fortune’ – declined.   

Lafite premium

A year ago Lafite’s premium was at 75%
and we wondered whether it would return to the pre-bull run level of 50%, as
shown on the chart above. This year its fall has slowed, dropping just 4% since
January to reach the current level of 67%. So where does it go next? After
declining for two years, Lafite’s share of trade by value on Liv-ex (below) has
recently begun to lift. Does this suggest that buyers see a 67% premium as fair? 

Lafite share of trade