First growths maintain early 2016 gains

For the first time since 2013 the Liv-ex Fine Wine 50 – the first growth tracker – has seen sustained monthly gains.

The Bordeaux first growth index has been on the rise since January this year, four consecutive months, having previously been running largely flat.

Back in February, Liv-ex examined the fact that with prices the first growths having fallen behind those of Burgundy and California thanks to their vertiginous fall in 2011 many of the wines actually looked ‘good value’ once again.

As Liv-ex pointed out, in both a brief recovery for the Fine Wine 50 in Q4 2012 into early 2013 and the current rally it is the Sterling’s weakness against the euro that is boosting activity.

The 2012-2013 revival promptly collapsed when the euro drifted which suggests “that the first growths were still perceived to be over-priced”.

The current sterling weakness is likely to last until the outcome of the ‘Brexit’ referendum on 23 June is announced – unless before that date it seems the UK will vote definitively to remain in the European Union.

If that happens and the Sterling gains or at least firms up against the euro once again, will buyers once more consider the first growths too expensive or will their gains continue?