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Noble Rot


Well, that was quick. In November of last year, the world was told to stock up on canned goods and prepare the bomb bunker for at least a three-year financial nightmare. Although global recovery will take some time, every news source is trumpeting ‘THE END OF THE RECESSION IS HERE!’

This brief blog is not about China’s growth, or India’s corporate outsourcing, or exploding I Phones in Brussels – it’s about wine – the power of brands, and the business of wine. Chateau Lafite Rothschild to be exact. Even if you don’t know much about vin, that name should ring a bell. It’s the Rolls Royce of wines, and before the recession hit, along with art collecting, and gold bullion, it was seen to be one of the few things not connected with stock market peaks and troughs. A Monet is a Monet, right? It doesn’t matter that high street clothing shops are going out of business or that Marks and Spencer are reducing chicken breast fillets by 20%, you still have a safe cellar.

It appears that even in the world of fine wines, prices have dropped during this recession by up to 33%. Except for Rothschild. According to figures compiled by Liv-ex, the electronic wine exchange, the average price for a bottle of 1982 Lafite was around $3,400 – the highest price yet. That’s almost $300 more than 2008, and that’s during a global recession. Not Bad, this is also more than $1,100 higher than in 2007. Amazingly resilient, when everything else has crumbled in the last twelve months. So strong is the 1982 Lafite that its value even took a slight beating from wine guru, Robert Parker, who dropped its score from a perfect 100 to 97.
Liv-ex’s director, James Miles believes the “Lafite effect” is do to the resilience of Asia’s economies and the unwavering desire for luxury items. Especially items that are in limited supply. Some wine experts think the prices can’t possibly continue to skyrocket, because other wines will, at some point, move into the picture. But, it’s hard to imagine that a status symbol such as this will fall from grace. Like Cartier, Porsche, and Cristal – a powerful brand is a hard thing to keep down.

The decision to invest today in Lafite probably depends on the question of whether it will become more socially desirable to serve other classic wines  in the far east, and whether another brand can take its place in the public’s mind. It’s impossible to predict, but my guess is that this will always be a strong horse.

So, dear readers, as we all emerge from our bunkers and wipe the last vestiges of canned spam from our mouths, perhaps we can meet at a designated location, pool our money, and buy an’82 Lafite for four grand. I think it could be a sound investment.

How ‘bout it?

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William R. Feins , freelance journalist from London, UK; he received his B.A. degree in Economics and his Masters in Sociology. William has always been interested in the mechanics of business and the inspiration of original thinkers, and firmly believes that the former can’t succeed without the latter. In his spare time, he enjoys the ridiculous spectacle of watching table tennis on a big screen (preferably at a pub) and reading weighty tomes about World War II.