Home > Uncategorized > Early estimates put losses near $8 billion in California wildfires

Early estimates put losses near $8 billion in California wildfires

November 2, 2017
fire fighter.

Downed power lines owned by Pacific Gas and Electric Co. are being investigated for starting the fires that ravaged northern California’s wine country. Photo AP

Those watching the cataclysmic fires raging through the vinelands of California earlier this month could see the destruction taking place in real time.

Now, there are some actual dollar amounts being put on that destruction.

According to an article in the Intelligent Insurer, the most-recent estimates of economic losses by catastrophe modeling firm RMS (Risk Management Solutions) put the losses between $6 billion and $8 billion.

That includes loss (most of which reportedly occurred in Sonoma County) due to property damage, contents and business interruption caused by the fires to residential, commercial, and industrial lines of business. Lost vineyards are not included.

California Wildfires

A frie truck rumbles past a small part of the destruction caused by the wildfires in California. Photo AP.

According to the San Jose (Cal.) Mercury News, as of Oct. 28, more than 150,000 acres had burned across Sonoma, Napa and Solano Counties. No one is trying to estimate how long it will take for the region’s $74 billion viticulture and wine-related tourism industry to rebound.

One way we can help that rebound is to visit the Napa, Sonoma and Mendocino areas later this fall or next summer. The entire area wasn’t scorched; in fact, many wineries saw a bit of an uptick in visits as soon as they reopened after the fire, even while repairs were underway..

“From a tourist perspective, the valley’s still pretty intact,” said Scott Goldie, a partner with the Napa Valley Wine Train, in an article in the Napa Valley Register.

Europe seeing short harvest: Three of the world’s top wine-producing countries – Spain, France and Italy – are dealing with weather-related, lower-than-expected harvests. The three countries account for 50 percent of the world’s annual wine production.

France says it expects its smallest harvest since 1945 while Italy reports the harvest is expected to drop by at least two billion bottles, according to the online website imbibe.com. The United Kingdom-based site reported recently that early reports have Italy’s 2017 crop at 38.9m hectoliters, 28-percent less than 2016 and the smallest since 1947.

According to imbibe.com, “Regions from Piemonte to Sicily were affected by the same spring frosts that hit much of Europe. The remaining crop was then reduced further by the ‘Lucifer’ heatwave, whose scorching summer temperatures caused drought in many regions and reduced berry sizes dramatically.”

It’s not clear how much of the impact will be felt by consumers except at the bulk wine level.

Brand owners “will be reluctant to pass on the full impact, as drastic price increases will lead to loss of markets that are extremely difficult to recover,” said an article from The Drinks Business.


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