Lafite Premium

Driven by demand from Asia, Lafite Rothschild’s price premium over the average of the other First Growths peaked at 129% in November 2010. This followed the announcement that the 2008 bottle would carry the Chinese symbol of the figure of eight, representing good fortune. Its premium has since dropped considerably and currently stands at 24.6%.

The sharp drop in Lafite prices from mid-2011 onwards coincided with a decline in buying from Asia, the market that favoured the wine most. This is well documented.

The scores of Lafite versus other First Growths has been explored less. The chart below shows Lafite’s scores (Wine Advocate) against the average for the other First Growths since the 2000 vintage. Assuming that a wine’s score is a reasonable proxy for its quality, Lafite’s quality was higher on average than the other First Growths until the 2009 vintage.

Since the 2009 vintage, however, Lafite has underscored relative to the other First Growths, perhaps helping to explain the decline in its premium. This is shown in the chart below.

Scores lafite

This topic will be explored further next week.