Lafite 1982 worth eight times its weight in silver

As regular readers of the blog will  know, Lafite Rotshchild 1982 has shot up in price in recent years. It has increased in value by more than 60% in the last year and more than 1,000% over the last ten.

But just how "valuable" has it become? To find out it we compared its price with that of other precious commodities.

A 750ml-bottle of the Bordeaux First Growth (which weighs roughly 750g, excluding the glass) last traded on the exchange at £3,500, having risen in price from £2,170 at the start of the year.

This is roughly equivalent to the value of 10,000 litres of crude oil, or 3,000 litres of petrol.

Relative to commercial wines, a small drop of Lafite 1982 (around 1 millilitre) now boasts the same value as a standard-sized bottle of Blossom Hill - the UK’s top-selling brand (£5).

Looking at metals, Lafite Rothschild 1982 is worth eight times its weight in silver and costs the equivalent of half a tonne of copper. Gold remains exponentially more expensive than Lafite by weight, with one bottle of the First Growth equivalent in value to 4 ounces (123 grams). Yet despite the rapid appreciation of gold prices in recent years, the same bottle would each have been worth just 1.5 ounces (47g) ten years ago.

Turning to more exotic commodities, we find a bottle of Lafite 1982 is worth almost four times its weight in black truffles and twice the price of essential oil made from rose petals (the world’s most expensive). It would also be a far more valuable gift than its equivalent weight in Frankincense oil or Myrrh resin – being 14 times the price of the former and 100 times the price of the latter.

Notes:
A 1x75cl bottle of Lafite contains 750ml of wine and weighs approximately 750 grams (excluding packaging). The value of other commodities and luxury items relative to Lafite has been calculated based on their equivalent value in weight (for solids) or volume (for liquids).

The prices given represent the lowest price a UK consumer purchaser could reasonably expect to pay for the product when buying in bulk.

Further info:

• Gold and Silver Prices are sourced and are converted from the London PM fix for one troy ounce on Friday 10th December.
• Truffle prices are for Grade A truffles (i.e. pieces between 10-60g).
• The rose essential oil price refers to “Rose Absolute” (100% rosa damascena), one of the world’s most expensive essential oils.
• The saffron prices is for 750 individual packs of Spanish “Coupe” Saffron.

 

 

Comments

[O Kleen]

This is an interesting comparison, yet I think it's slightely flawed. For once 82 Lafite - or any other wine of a certain vintage - is strictly limited in supply - that is constantly dwindling. Especially for the 82 this is true - as this is beeing drunk now.
Theoretically the supply for gold and oil are limited as well - yet ever more sophisticated extraction techniques (e.g. deep water exploration) push this boundary constantly. The fundamentals for 82's Lafite are a little different - there will be no new supply. Yet it seems that demand is increasing with the number of rich people growing worldwide and customers in emerging markets starting to get interested in fine wine.
So the question is if fine wine needs to be compared with art or commodities. A gramm of the Mona Lisa canvas is probably quite expensive. Obviously there are more bottles of 82 Lafite then there are Mona Lisa's - but the supply is clearly more limited than it is for oil or gold. So a valuation "somewhere in the middle" doesn't even seem very ridiculous when seen from this angle.
Does this justify Lafite's premium over the other first growth's? Does this justify the level of fine wine prices in general? Tough to say - as in any other market it's a question of supply and demand. So how many people are holding wine for investment? And if so - if it dropped significantly - would they sell it off or drown their sorrows drinking the wine they bought too expensively (thus limiting supply again and supporting prices).
Not an easy question to answer.. I for myself can say if all my wine would be worth zero tomorrow - I'd happily drink it when I retire.