600,000 gallons were lost in last Saturday's earthquake, writes JONATHAN FRANKLINin Santiago
THE MASSIVE earthquake that struck Chile last Saturday caused hundreds of millions of dollars of damage to one of the world’s most successful wine industries, sending rivers of merlot and cabernet sauvignon pouring from cracked barrels and vast storage tanks onto warehouse floors.
“That was hard to watch,” said Pablo Morande jnr, who said he looked on as 660,000 gallons of wine sloshed into the ground at his vineyard in Chile’s battered wine country.
Vintners and analysts of an industry that is the fourth-leading wine exporter to the United States after Italy, France and Australia estimated that at least 150 million bottles’ worth of wine, and perhaps much more, was destroyed in the 8.8-magnitude tremor, which killed more than 800 people. Rene Merino, president of Wines of Chile, said that at current retail prices in the United States, the loss was worth $975 million in spilled wine alone.
The full extent of the damage to the industry, which has annual sales of about $1.3 billion, is only now coming into focus as wine producers take stock of their losses. Some industry officials played down the damage, saying there would be little long-term effect on price or supply.
Officials from Chile’s biggest producers, representing 95 per cent of the industry, met Wednesday and concluded that the earthquake’s effects on business were not as bad as initially feared. Merino, who led the meeting, said about 12.5 per cent of the country’s cellared wine was lost. But others offered a figure of 20 per cent or more, which could create serious problems for Chilean exports in the coming months.
“Many wineries that lost 80 per cent of their production are publicly saying just 15 per cent was lost,” said one wine executive, citing the fear that distributors would cut off wineries thought to be most heavily damaged by the quake. “This is an incredibly touchy subject.”
About 70 per cent of Chilean production takes place in areas badly affected by the quake, including the Maule, Colchagua and Cachapoal valleys.
Much of the damage came when massive storage tanks, stainless steel vats more than 15 feet high, toppled. Violent shaking snapped tank legs bolted to the ground, knocking the vats over and causing a domino effect as tank after tank crashed to the ground.
Wine stored in barrels was also lost as the barrels rolled off racks, cracked open or popped their seals, flooding warehouses.
Winemakers who have visited the region said the damage extended far beyond finished wine. The quake also caused massive damage to infrastructure, ranging from cracked underground irrigation tubing to collapsed warehouses.
Although wine represents just 1 per cent of Chile’s exports, the wine industry employs 80,000 full-time workers. In Chile’s central valley, wine is an important source of employment for thousands of temporary fruit pickers who flood the region every March.
A mad scramble to buy grapes is now expected as top producers seek to guarantee future wine orders. However, analysts said that after reduced sales last year because of the global economic crisis combined with a bumper harvest, wine storage was far above normal levels.
With the harvest just under way, Chile’s wineries are scrambling to find electrical generators to keep drip irrigation systems running. Centuries-old irrigation canals that bring fresh water from the mountains have collapsed, with water spilling down the hillsides long before it reaches the grapes.
“The vineyards still have no electricity in Maule, so they have not watered their vines since Saturday, so already we are talking five days. It is a hot time of year . . . The fruit is going to raisin,” said Grant Phelps of Casas del Bosque winery.
Phelps said quick work by his employees to turn on an emergency generator to pump wine from damaged vats averted worse losses. But wineries further south were harder hit. Some who lost electrical power could do nothing but “watch it go down the drain”.