Lafite's premium

Ten years ago the premium that Lafite commanded over the other First Growths was just 5%. As Asian demand accelerated prices (something we have explained in an earlier blog post) the premium rocketed, peaking at 129% after it announced that the 2008 bottle was to carry the Chinese symbol of the figure of eight: a symbol of good fortune. This marked the end of Lafite’s good fortune. Prices declined, and a year ago its premium appeared to be stabilising at 67%.

Since then the premium has dropped to 44%. One reason for this is the changing of wines in the index: we calculate the chart using the ten most recently physical vintages, and thus in June last year we removed Lafite 2000 (which with a Mid Price of £11,780 has a premium of 67% over the other four) and added Lafite 2010, where Latour trades at a premium to Lafite.

Once again, the premium would appear to be stabilising: it has held steady between 43% and 47% for a year. But it remains buoyed by older vintages: Lafite 2001, which will soon leave the index, has a premium of 68%. Lafite 2011, which will soon join it, has a premium of 22%. For Lafite’s newer vintages the gap between it and the other First Growths is shrinking – at some point, can we expect a return to the near 1:1 ratio of ten years ago?