Château Lafite Rothschild: What's the next US$ 234,000 bottle?

In 2010 a single bottle of Château Lafite Rothschild sold for just under 234 thousand US Dollars, setting a record for the highest price ever paid for a fine wine at auction. Admittedly, this was the famed 1869 vintage, the first to be produced under the ‘Rothschild’ name, but its astronomical price underlined the fantastic investment potential of great Bordeaux estates like Lafite Rothschild in today’s world.
Lafite Rothschild is the most famous producer on Bordeaux’s ‘Left Bank’, and it is arguably the most recognizable name in all of fine wine. Its ironic status is anchored by a heritage which few wine estates, and almost no other luxury brands, can match.
The property has been called ‘Lafite’ since the year 1234, but the current vineyard was planted in around 16 80 by Jacques de Ségur. By the early 1700s, its quality was already high enough for it to be referred to as the “The King’s wine”. By the end of the Eighteenth Century the world’s greatest collectors, including US President Thomas Jefferson, regularly beat a path to the château’s door - desperate purchase wines such as the celebrated 1795 and 1798.
Confirmation of Lafite Rothschild’s position at the top of Bordeaux’s hierarchy came in 1855, when the estate was one of only four properties assigned ‘First Growth’ status in the world’s first official wine classification.
The modern history of Lafite starts with its acquisition by the Rothschild family in 1868. This was when the famous "Rothschild" name appeared on the label for the first time.
Much of the credit for Lafite’s current position must go to Éric de Rothschild, who led the estate with great skill from 1974 to 2018. Today responsibly for the property has passed to Eric’s daughter Saskia de Rothschild, who is part of an exciting group of young, often female, leaders ensuring that the finest wines of Bordeaux remain relevant and exciting to a new generation of global collectors.
Out of all the Lafite Rothschild vintages on the market today, the 2019 is the best value.
Lafite Rothschild 2019 is trading at US$ 4,100 per case of six (the most liquid case size) which is a 20% discount to its fair value of just over US$ 5,100.
But fair value analysis isn’t the end of the story. To be a candidate producing exceptional long-term performance, I look for a number of other factors:
Firstly, the vintage has to be of sufficient quality. The 2019 vintage in Pauillac is rated ‘Extraordinary’ by Wine Advocate, with a 96 points score.
Secondly, for long-term holdings I really want to see a perfect 100-point score from Wine Advocate, which I think is still the most influential publication globally. Lafite Rothschild 2019 ticked this box in 2022 when Wine Advocate’s William Kelley gave it the magic three digits and called it “one of the greatest wines” of the vintage.
Next up, I need to see serious longevity. I am looking to hold my positions for many years, possibly decades, and hence they need to have the aging potential to keep improving in the bottle for decades. Lafite Rothschild 2019 has a drinking window until at least 2065, giving this wine a great chance to become both uber scarce, and uber desirable, at the same point in the future. That will be the time to realise the gain.
I also like the fact that the 2019 vintage is now physical (i.e. in bottle and distributed to consumers), because that means that the gun has already been fired on its consumption curve.
Cost of carry is a significant factor which many newcomers over-look when they come to fine wine investment. If not properly considered, this can wreak havoc with the real return of an investment portfolio. For a wine like Lafite Rothschild 2019 I would be keeping this in Cru World Wine’s dedicated Bordeaux storage facility.
The annual cost to store and insure this wine would therefore be just US$ 10.80 a year, a cost of only 26 basis points a year. This is much cheaper than storing commodities like Gold or Silver and is cheaper than most actively managed equity or bond fund.
There are competing claims for ‘best current Lafite buy’ status of course. A case can be made for the 2016, which is probably the best vintage of the 2010s, and the 2018 will always be highly sought after due to its special label commemorating the Rothschilds’ 150 years of ownership. But both those vintages are significantly more expensive than the 2019.
Market wisdom has it that you make your money on the purchase price of an investment, not on the sale price, and for this reason Lafite Rothschild 2019 looks like the best modern candidate to replicate the heady returns of those great Lafites of old.

[@chen4404]

How about 2018 ?

[@214steven]

Thank you for your video. I bought 1 case of 2019 lafite
Do you recommend to buy 2022? Feels abit expensive. In Canada Ontario bordeaux futures lafite 2022 price is $1475.
Your insight would be recommended
Thank you

[@cruworldwine888]

Thanks Steven. The new 2022 sold very well en primeur, and clearly that is a vintage collectors are going to want. But at current prices, the 2019 looks better value to us. The nailed on 100pts WA makes a big difference, and it is three years younger. If the 2019 moves up in price, and the 2020 too, then the 2022 could become the most attractive vintage. But it isn't right now.

[@214steven]

Thank you for your insights. Cheers

[@cruworldwine888]

See Lafite Rothschild 2019 (analytics and trading) for FREE on the Cru World Wine platform: markets.cruworldwine.com/uk/product/lafite-rothschild-2019-6x75cl