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Will wildfires leave lasting economic scars on Californias vital wine country?

Time:2017-10-30 10:16wine - Red wine life health Click:

Wine scars lasting Californias economic

Now that the wildfires that have swept through the vineyards, forests and towns of Northern California’s wine country since Oct. 8 have been virtually contained, it’s time to assess the damage.

So far they have destroyed more than 8,400 structures in Napa, Sonoma, Mendocino, Lake and Solano counties and killed at least 42, making it the deadliest series of fires in California’s history.

The devastating scenes of burned-out neighborhoods and wineries that have flashed across global television screens have prompted tourists to contact hotels, wineries and restaurants in the area to cancel reservations. Wine tourists who were in Napa and Sonoma immediately packed their bags and fled the smoky air as it filled with gray ash.

Initial reports indicate that more than two dozen wineries suffered damages, which means the region’s overall wine production, with more than 1,200 wineries, survived largely intact. Yet the overall economic impact could end up cutting a lot deeper, not only for the region but for the state and the nation.

So how long will the horrific images linger in the minds of tourists and keep them from returning to a region that depends on wine tourism as its economic backbone?

Will wildfires leave lasting economic scars on Californias vital wine country?

Firefighters watch as a helicopter drops water over a wildfire burning near a winery in Santa Rosa, California. AP Photo/Jae C. Hong Napa and Sonoma: Beyond the tasting rooms

Wine tourism is a pillar of the economies in all five affected counties, employing tens of thousands of people. But the sudden absence of visitors to the tasting rooms of the region’s wineries will leave economic scars well behind those walls.

That’s because each time tourists visit a Sonoma or Napa Valley winery to taste or purchase a few wines, they reserve rooms in local hotels, dine out in regional restaurants, hire tour operators or enjoy local attractions such as hiking, biking, golfing or relaxing in a spa.

In Napa and Sonoma counties, the heart of America’s wine industry with almost 1,000 wineries between them, this is especially the case, as is clear when one looks at the numbers.

In 2016 alone, Napa Valley attracted 3.5 million tourists who, on average, spent US$402 a day on lodging, food and entertainment, resulting in $1.9 billion in total revenue. For Sonoma, visitors spent an average of $389 a day, or a total of $1.93 billion, in 2016.

Together the two neighboring counties employ more than 34,000 people in their tourism industries. At a time when both counties need additional funds to assist in rebuilding the infrastructure, any loss in tourism revenues will be painful.

Will wildfires leave lasting economic scars on Californias vital wine country?

The California wine industry employs thousands of people, including Gonzalo Jauregui, a local grape picker, who is seen browsing through donated toiletries at the Sonoma-Marin Fairgrounds in Petaluma, California. AP Photo/Olga R. Rodriguez From stem to stem

While the affected counties will bear the brunt of any long-term pain, the effects will be felt beyond their rolling hills. It’s easy to see by following the grapes from the vine stems on which they are grown to the fine-stemmed glasses in which they are drunk.

After the grapes are grown and harvested, trucks ferry them to a winery facility for crushing and fermentation. Next the wine is aged, bottled and then sold to distributors, retailers or end consumers.

Each of these steps is part of an extensive supply chain that involves wages, salaries, interest payments, taxation, rents and profits, all of which generate economic activity in the surrounding counties, the state of California and the country.

Bottles, advertising, consulting, corks, barrels, cardboard, stainless steel tanks, forklifts and all kinds of goods and services come from around the country. And all these wine industry workers, wherever they live, support their local economies with their wages.

For example, when a glass company in Arkansas gets an order for 100,000 new wine bottles, new workers may be hired and more revenues are made by the glass company. The employees and the employer now have a little extra money to spend in their local stores, and the town in Arkansas gets an economic boost that would not have existed if it hadn’t received the glass order.

Many economic studies, such as ones by Frank Rimerman & Co. in St. Helena, California, an accounting firm that specializes in the wine industry, show how wide and deep the wine industry is, not just in Napa and Sonoma but throughout the state and in many other states.

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