Lafite’s premium weakens further

Château Lafite’s price premium over its fellow first growths continued to shrink over the course of 2016 having declined steadily since 2011.

first growth price score correlationWhen Lafite was the darling of the Chinese market its popularity was such that by November 2010 it was, on average, 129% more expensive than its fellow firsts (based on the average price of the last 10 physical vintages).

Since mid-2011 however that gap has narrowed as Lafite’s hold on the market weakened and the likes of Mouton Rothschild and Haut-Brion rose to prominence within the first growth arena.

The premium now is just 24.6%, having slipped from 44% in 2014 and down to 35% in 2015.

In its first post on the topic, Liv-ex suggested that part of this decline may have been due, at least in part, to the dip in critical scores that Lafite has been receiving since 2009 – especially from The Wine Advocate either from Robert Parker or, latterly, Neal Martin.

Until 2009 Lafite’s scores either out-performed or comfortably kept pace with the other firsts but afterwards scores began to slip, becoming particularly disconnected in the 2011 and 2012 vintages and reaching a nadir in 2013 when Lafite was rated an historically low 88 and widely held to be one of the vintage’s most disappointing wines (although it rebounded with a 94-96 spread for both its 2014 and 2015 wines).

Liv-ex followed up its observation with another blog post this week where it tested this theory but, in fact, found that it was not entirely true and in fact, on average, Lafite continues to strongly outperform its fellow firsts on a points to price ratio.

As the chart above shows, Lafite generally commands a higher brand premium compared to the other four. Latour, Haut-Brion and Margaux certainly see a greater upswing in price when highly scored but otherwise lag far behind Lafite – although Latour comes closer to Lafite in price towards 90 points.

As Liv-ex continued: “Lafite Rothschild and Mouton Rothschild see less of an incline, perhaps because they enjoy a particularly strong following in Asia where brand buying is more prevalent and high scores are relatively unimportant.”

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