California’s wild fires – the economic impact.

Wine and wine tourism contributes approximately $57 billion to the California state economy. What impact will the recent wild fires have on the wine economy and state economy?

Since Sunday, about 200,000 acres in Napa, Lake and Mendocino counties have been caught up in the latest wild fires to hit California. Most of these comprise land, oak, grass and chaparral.

At the moment, there is no exact definition of the number of hectares related to the wine industry, but fire officials “said their crew often counted on the open space of vineyards to slow down the spread of fire” according to the Los Angeles Times.

Of the 1,900 wineries in the state, a dozen have suffered catastrophic damage, albeit accounting for “less than 1% of the region’s wine-making capacity” said UC Davis, who reminded that that Napa and Sonoma county do not dominate grape growing in the region (Central Valley grew 70% of the state’s wine grapes last year). Indeed, only 10% of the county is planted in grapes.

Luckily, 85% of grapes had already been picked by Sunday night. The most damaged grape variety was Cabernet Sauvignon according to UC Davis, worth around $175 million.

Further, most of the bottled wine was moved out of the wineries and into warehouses.

“Since most of the grapes were harvested before the fire, smoke taint for this harvest will be limited. Only the grapes still in the vineyard may potentially be affected. There is no data, but we do not expect smoke to be a problem in wineries. Fermenting wines will be protected by the released carbon dioxide and finished wines should be sealed to protect them against any smoke that may enter the winery” said UC Davis in a statement.

However, the number of premium bottles put on the market could drop and therefore the price is likely to increase said UC Economics. They think a $66 bottle could rise to $100 as a result. However, according to Winebusiness.com, more than half of US consumers bought $9 to $15 bottles to drink at home.