Bay Area Fire Destroys Rare Wines in Storage

A fire that blazed through a wine storage warehouse here may have wiped out half a million cases of rare vintages, destroying wine libraries and devastating some vintners who lost most or all of their inventory.

The fire started Wednesday afternoon and burned for six hours at Wines Central, turning the exclusive facility’s key asset into a liability. The 3-foot-thick concrete walls and roof of the converted 1942 military facility had kept wines cool but kept firefighters out.

Officials said losses could reach $100 million.

By Thursday, vintners and private collectors gathered anxiously outside the warehouse that once housed Navy torpedoes. Rumors about which top vintners had suffered the most flew like sparks through an industry that has suffered from a recent wine glut.

“Wineries like to keep year-by-year vintages stored so they can see how the wines age and compare,” said Gladys Horiuchi, spokeswoman for the San Francisco-based Wine Institute, of the lost library collections. “Hopefully they have more bottles of the same vintages somewhere else or in the vintner’s house.... Those are irreplaceable.”

Horiuchi said the loss was small relative to the 281 million cases of wine sold in the U.S. yearly. However, if all of it is “ultra-premium” -- retailing for more than $14 a bottle -- the dent could represent about 3% of California’s annual production in that category, she said. For those who lost all, she added, “there’s going to be some individual pain here.”

In an earlier interview with the media, the warehouse manager said inventory came from more than 80 wineries and 40 private collectors, who stored barrels and bottles of wine worth thousands of dollars in locked cages. Although experts speculated that small vintners were more likely to have lost all, cases spotted through the warehouse doors Thursday revealed that larger entities, such as Sterling Vineyards and Beaulieu Vineyards, known as BV, were storing there too.

As the industry struggled to understand the scope of the damage and stem rumors Thursday, federal investigators from the Bureau of Alcohol, Tobacco, Firearms and Explosives stepped in to assist local officials.

Because of the size of the blaze and potential dollar loss, the agency dispatched a national response team of 20 experts who were expected to arrive today, said Dennis Downs, the ATF’s resident agent-in-charge.

Among the experts are forensic mappers, chemists, dog handlers and structural engineers who will determine whether the building is safe for investigators to enter. “It’s one of our highest responses,” Downs said. “We’re investigating the cause and origin of the fire.”

The concrete roof on the converted 240,000-square-foot specialty warehouse had been receiving a new layer of tar over the past five days, neighbors said.

Wines Central, owned by a San Rafael real estate developer, is one of a cluster of bonded wine storage facilities in the Vallejo area that serve the Napa and Sonoma valleys and other winegrowing areas. Wine that has not been taxed must be housed in bonded facilities -- storage space now in high demand.

The warehouse is on Mare Island, a former naval base in San Pablo Bay, about 35 miles northeast of San Francisco.

“In this day and age, wine storage is pretty hard to come by,” said John Vidulich of Yandell Truckaway Inc., which transports wines to the facilities. “You don’t want to build a warehouse at a winery because you’re taking up dirt for the grapes.”

Vidulich said he knew of a few vintners who “had their entire inventory in there,” because Yandell had trucked it through the fortress-like steel roll-up doors. He declined to name the vintners.

Douglas Due lost 800 cases -- nearly his entire production -- from his Domaine La Due winery in Oakville. Gone in a day was more than 90% of his inventory: an ’01 Oakville Cabernet, ’02 Napa Valley Cabernet and ’02 Napa Valley Merlot.

Although he predicted his winery may have new products to sell by April, other vintners won’t be able to produce for two years.

“You lose all your placements on the wine shelves and wine lists,” Due said. “You lose your distributors because they have to get someone else. All the brand building you’ve done is gone. You can’t really put a price on that. Unfortunately, there are going to be some wineries that won’t recover.”

Wines Central’s Argentine-born owner, Jack Krystal, was at the scene Thursday but unavailable for comment. A recent profile in the Vallejo Times-Herald described him as a wine lover charmed by the notion of converting the storied naval facility into a wine cache.

The company website touted the building’s state-of-the-art fire monitoring system and “ideal naturally insulated environment that echoes with untold tales of historic events that have taken place within its walls through the years.”

While Krystal remains the owner, management of the facility switched hands in May to Oakland-based Pacific American Services, whose chief executive could not be reached for comment Thursday.

The extent of the damage will probably not become clear for some time. Concerned vintners recalled another warehouse fire in 2000 -- at Frank-Rombauer Cellars in Calistoga, Calif., -- where insurers salvaged bottles that later turned up on the market at reduced prices. The wines were heat-damaged, alleged vintners, who sued.

Insurers are required to remove corks, labels and other identifying marks before selling fire-salvaged wine.

Even wine that appears to have survived the eight-alarm blaze, may be ruined, noted Nancy Nealon, controller for vintner Nils Venge’s Saddleback Cellars.

Saddleback stores the bulk of its wine at a nearby facility and only used Wines Central for overflow, said Nealon, who spent the morning with others peering inside the opened steel doors at what appeared to be stacks of intact cases.

“The question is going to be, when you open up those cases and taste the wine, is it cooked?” she said. “It’s most critical for people to wait and get the critical information and then start the investigative process. Even if they come back and say none of those wines were damaged in the fire, we’re still going to go through the cases methodically.”

Customers might feel the effects of the fire in unexpected ways, broker Joe Ciatti said.

“People losing their library wines and vintages isn’t a good scenario,” he said. But “it might put pressure on wineries to sell more of their better earlier vintages. We still have a lot of wine out there even from the premium sector. Somebody’s misfortune might benefit someone else who otherwise wouldn’t be selling.”

Durell reported from Vallejo and Romney from San Francisco.