07.19.2012  
 

Pair of Blazes Prove Fires Can Strike Wineries

Experts advise: Make sure your buildings are up to code and inventory is insured at market value

 
by Andrew Adams
 
winery fire
 
Oakstone Winery in Fair Play, Calif., suffered $3.6 million in damage from a July 7 fire. Owner John Smith has pledged to rebuild.
San Rafael, Calif.—The damp and usually cold cellars at most wineries don’t particularly evoke the thought of fire risk. But in recent weeks, two wineries were gutted by early morning blazes that swept through, destroying equipment and inventory.

On July 7 in Fair Play, Calif., the warehouse and tasting room building of Oakstone Winery caught fire just before 4 a.m. The fire destroyed the building, causing $3.6 million in damage.

A few weeks earlier, in late June, Miletta Vista Vineyards near St. Paul, Neb., burnt down in another early-morning fire.

The owners of both wineries have pledged they’ll rebuild.

Fires rare but catastrophic
While fires in the wine industry are relatively rare, they are often catastrophic. One of the worst winery fires in recent years came in the summer of 2000, when a fire quickly spread through a warehouse in Calistoga, Calif., and destroyed 85,000 cases of wine, resulting in $500,000 in property damage and a loss of $30 million in wine.

Winery owners are still bitter about the 2005 arson fire at a wine warehouse on Mare Island in the San Francisco Bay Area. The fire claimed more than 4.5 million bottles and caused $54.2 million in damage, wiping out the vintages of a few wineries. The convicted arsonist, Mark Anderson, is serving a 27-year prison term.

Pioneer Fire Protection District chief Robert Gill was the incident commander at the Oakstone Winery fire. He said the blaze required 25 firefighters from several neighboring fire departments. Gill said an independent fire investigation company, Fire Cause Analysis, hired by the winery’s insurance carrier pinpointed the origin of the fire at the south end of the building near an electrical panel and forklift charging station.

The fire was so extensive, however, that Gill said the firm was unable to determine the exact cause of the blaze. He added that the building, which was built in 1996, did not have a sprinkler system or a water supply, because codes didn’t require them when it was built. Gill said that with 43 wineries in his rural district, winery fires are a definite risk.

He added that winery owner John Smith has been a strong supporter of the fire district, hosting its twice-yearly crab banquets. Gill said the Smiths and the winery will “come back 100%.”

Oakstone Winery opened in 1997 and produces 8,000 cases per year with an average bottle price of $18. The winery’s “Slug Gulch Red,” a blend made with various grapes depending on the vintage, earned a dose of critical acclaim and some fame for its whimsical marketing tagline as “the best mediocre red wine in California.”

Smith is traveling out of state but did post a pledge to rebuild on the winery’s website and thanked the winery’s fans on its Facebook page. “Thanks to everyone—the outpouring of sympathy and support has been overwhelming! We’ll let everyone know when we have our plans sorted out, but we will see all of you in a tasting room again,” he wrote.

Fire safety and insurance
Guy Colonna, division manager for industrial and chemical fires at the National Fire Protection Association, said there are no fire codes specific to the wine or beer industries.

He said the single most dangerous aspect of winemaking is the risk of asphyxiation for staff working in confined spaces, often in the presence of carbon dioxide from fermentation or from inert gases for flushing out oxygen.

Colonna could not think of any fire risk especially unique to wineries, but said the greatest hazard is probably from electrical systems and all the water used in winemaking. However, if a winery is compliant with current building and fire codes, that risk should be minimal, he said, adding, “The biggest issue is the electrical.”

If a winery is operating in a converted building like a garage or house, Colonna said the owner or manager should make sure the winery complies with industrial and commercial codes.

Brian Stephenson, the co-leader of Heffernan Insurance Brokers’ wine group in Petaluma, Calif., said the two main issues wineries should address to make sure their insurance would cover the damage of a major fire.

He said many older wineries are housed in buildings lacking modern fire-suppression systems like sprinklers. A policy may need to be amended with extra coverage if it doesn’t comply with the most current building codes.

“The other thing they may need to know in a time of loss is you need to make sure you’re covering your wine,” Stephenson said.

Some wineries want to insure their inventory at bulk wine prices to lower the cost of their premiums, Stephenson said. If an estate winery insures its back vintages at the current price for bulk wine, Stephenson said it’s going to be a challenge for them to replace that product. “They can’t replace it, and they can’t call Ciatti or Turrentine for the same quality wine they were going to sell,” he said.

If, however, the wine is insured at full market value, that settlement should get the winery to the next vintage.

Wineries aren’t considered at more risk than most commercial buildings, but Stephenson said there’s always the risk for the “one big loss” when a fire can destroy a building, expensive equipment and years of inventory.

“It’s the big events, when you get fires like that,” he said. “The Mare Island fire changed the industry.”

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