What does the future hold for Lafite Rothschild?

Lafite Rothschild is the buzz word in luxury fine wine. It is a status symbol among Chinese buyers and is considered one of the greatest brands by the wider wine industry.

But what does the future have in store for Lafite? It has been named as the culprit for driving prices down on the wine investment market at the end of 2011 and the Liv-ex Fine Wine Exchange has detailed its expectations for the first growth.

Over the long-term, Liv-ex predicts that Lafite will not return to its November 2010 peak of a 129 per cent premium over other first growth wines.

This, it explained, is largely down to the market in Asia, which over the past 12 months or so has broadened its interest to include other Bordeaux chateaux, including lower-value wines, as well as regions in Burgundy and even Italy.

However, this does not mean to say that Lafite will suffer any price falls; quite the opposite. Since the start of the year it has seen a modest rise in value on the Liv-ex Fine Wine 50 Index and is expected to appreciate in value over the rest of the year too.

"All the evidence tells us that the base demand for Lafite has its core in China," Liv-ex remarked.

"Its recent price growth therefore points to increasing demand from the region - a trend, were it to continue, that would be welcomed by the broader market."

When compared to other first growths like Mouton Rothschild, however, the future price growth of Lafite could be slower until all first growths are trading at a similar price level.

The journey Lafite has taken has been remarkable. Liv-ex posted a graph showing the wine's performance since December 2005 and it has soared to dizzying heights to become a 'super brand'.

Back in 2005, Lafite was around eight per cent more expensive than other first growth wines. By November 2010 it was posting premiums of 129 per cent. On average over the time period it has still enjoyed a premium of more than 60 per cent.