California Fires Hit Treasury Wines
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Treasury Wine Estates shares eased 1.4% to $14 yesterday after the company revealed “limited damage” to its northern Californian wine businesses from the terrible fires that have killed at least 13 people and caused tens of billions of dollars in property damage.
More that 1,500 houses have been destroyed, a number of major hotels have burned or badly damaged, including the Fountaingrove Inn and the Hilton Sonoma Country in Santa Rosa (where the damage seems to be greatest, especially among homes. More than 60,000 hectares have been burned by more than a dozen fires in around the North Bay area of northern California
The Silverado Resort and Spa in Napa County, which hosted a PGA golf tournament over the weekend, was evacuated overnight as flames approached. The resort said later that it was still intact and its guests were all safely evacuated.
At least 10 people have died and authorities expect that to rise with missing persons reports covering more than 150 people this morning. More than 100 people have been injured while losses among animals are also high.
Californian fire authorities said 15 separate wildfires and several more smaller fires had burnt more than 73,000 acres in the famous wine regions and surrounds.
Treasury Wine Estates (TWE) issued two statements yesterday to update investors on the fate of its winers and vineyards in the areas.
TWE says about 90% of the grapes at its 46 vineyards in California had already been harvested, with reports of the destruction of some buildings at its own historic Stags’ Leap Winery.
Treasury, which owns the Penfolds, Wolf Blass and Wynns in Australia, also runs a large United States wine operation centred in California where its brands include Beringer, Sterling Vineyards, Chateau St Jean and Stags’ Leap Winery.(The old Beringer wine assets)
Treasury runs seven wineries and at least 46 vineyards in the Napa and Sonoma counties. The company wouldn’t comment specifically on reports by Californian media outlets that buildings at its Stags' Leap Winery had been destroyed. Stags' Leap was established in 1893 and is a 240-acre property.
The company told the ASX in a second update on Tuesday afternoon that based on what it currently knew, "there is limited damage" to Treasury's infrastructures and sites, but acknowledged that it had limited access to all of the assets in the region.
But it was able to say that most of its grapes from the 2017 Californian vintage had already been harvested.
“There remains just over 10 per cent of our total vintage to be picked in Napa/Sonoma,” the company said.
Smoke taint affecting the grapes still to be picked is likely to be a major issue which the entire industry will need to confront once the fires are contained. Cabernet sauvignon grapes are among the last variety to be picked and go into some of the region's most valuable wines.
“At this stage, there is limited damage to TWE’s infrastructures and sites, however the fires are ongoing, and TWE still has limited access to all of its different assets,” the company said in its first statement to the ASX.
TWE said its focus was ensuring that all employees were safe.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.