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Lafite-Rothschild ’04 Drops to Six-Month Low of $8,130 in London

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Aug. 19 (Bloomberg) -- Two cases of 2004 Chateau Lafite-Rothschild, a first-growth wine from the Pauillac region north of Bordeaux, sold for 5,200 pounds ($8,130) each on Liv-ex last week, the lowest level for the vintage in six months.

The two deals, on Aug. 15 and Aug. 16, were 8 percent below this year’s high of 5,641 pounds reached last month and 39 percent down from the record 8,500 pounds at which it traded in December 2010, as Chinese demand for Lafite powered a bull run in top Bordeaux wines.

The Liv-ex Fine Wine 50 Index has declined since March 15, paring an eight percent gain made in the previous 10 weeks to leave it three percent up since the start of this year. Lafite, one of the highest-priced producers of the Medoc along with Chateau Latour, Chateau Mouton-Rothschild and Chateau Margaux, has lagged the index this year as investor attention has turned to rival growers and wines from other regions, notably Burgundy.

“I expect the indices will continue to drift,” Chris Smith, investment manager at The Wine Investment Fund in London, said last week. In a monthly report on the wine market, he said that while top-rated, mature vintages saw most interest, “younger, weaker vintages fell the most sharply.” The fund, invested in Bordeaux, manages $50 million.

Cabernet Sauvignon

The 2004 Lafite is the estate’s third-cheapest of the past 15 years, ahead only the recent 2011 and 2012 wines, according to merchant data compiled by Liv-ex. It was rated 95 on a 100-point scale by U.S. critic Robert Parker, ranking it below six other vintages from the grower in the past decade.

Chateau Lafite-Rothschild has more than 100 hectares (247 acres) planted with red-grape vines. Cabernet Sauvignon typically makes up from 80 percent to 95 percent of its wine, with Merlot from 5 percent to 20 percent, and smaller quantities of Cabernet Franc and Petit Verdot.

The vineyard, owned by Domaines Barons de Rothschild (Lafite), is on the left bank of the Gironde estuary and ranked among Bordeaux first-growth estates in the Medoc classification drawn up for Napoleon III’s 1855 Paris Exhibition, which remains in force.

Its vineyards date back at least to the 17th century and the estate has been under the control of the Rothschild family since being acquired by Baron James de Rothschild, then head of its French branch, in August 1868.

To contact the reporter on this story: Guy Collins in London at guycollins@bloomberg.net

To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net

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