How much are chateaux really worth?

Château Lafite may be worth as much as €4 billion and Le Pin not far short of €100m, according to a valuation of Bordeaux’s leading properties.

Liv-ex has calculated the worth of the region’s top châteaux and, using a series of measures (see below) has produced a list of just over 50 estates worth over €50m, with, perhaps unsurprisingly, the first growths filling the top five spots, and all but Haut Brion valued at more than €1bn.

Lafite, in first place, is valued at €3.7bn, based on an average case price of  €12,589 from a production of 22,000 cases for the grand vin and an average price just short of €4,000 for its 24,000 case-strong second wine.

This puts it at more than double the value of second placed Latour, worth €1.278bn, and over fives times more than Pétrus, the most valuable right bank estate, and sixth in the survey, with a potential price tag of almost €663m.

Meanwhile, despite the lowest production on the list with a 600 case average, Le Pin is valued at almost €90m, and enters the chart in 33rd place, just behind Pape Clement.

Liv-ex pointed out that 22 of the top 25 estates in the survey are from the Left Bank, and it is just Pétrus, Cheval Blanc and Ausone that break into the top half of the table – for the most part, the right bank estates suffer from relatively low production figures and a lack of powerful second wines.

The fine wine exchange also stressed that, based on its methodology, Lafite is the most valuable wine brand in the world, worth as much as global drinks giant Constellation Brands, and that the château’s second wine alone, Carruades de Lafite, generates more revenue that the likes of Haut Brion or Pétrus.

The Liv-ex methodology considered the current trading prices for each major estate’s five most recent vintages multiplied by the quantities produced, before dividing the result by 1.5 to allow for margins taken by negociants and merchants.

It then looked at recent transactions of major estates, and, to arrive at a final figure, multiplied the total income achievable by 15.

Liv-ex justified the seemingly high valuations on estimated gross margins of 70-99% for to cru classé estates and the rising prices for fine wine, and pointed out that the multiplier (15) used represents an estimated value of 16-20 times pre-tax earnings.