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Face of California Wine Is on Fire, Threatening $50,000 Grapes

Oct 9, 2017

(Bloomberg) - Wildfires tore through northern California’s iconic wine-growing regions of Napa and Sonoma, damaging some of the most valuable vineyards and wineries in the U.S. and leaving vintners dumbfounded.

“We are all in shock and trying to help our fellow growers and neighbors where we can,” said Heidi Soldinger, a spokeswoman for Napa Valley Grapegrowers.

While California’s coast accounts for a relatively small percentage of U.S. production, it is the most valuable region in the country, said Stephen Rannekleiv, a beverage analyst at Rabobank International. The lion’s share of grapes in the state are grown in the San Joaquin Valley, where cabernet sauvignon grapes go for about $400 a ton. By contrast, the same fruit from Napa Valley usually costs closer to $7,000 a ton, and can sell for as much as $50,000. High-end wines are driving demand growth in the U.S., with bottles priced over $10 seeing the biggest gains, Rannekleiv said.

“That’s why it’s so devastating -- so much of the value is created there, and incredible investment has gone in there,” Rannekleiv said by telephone. “It’s the face of the California wine industry.”

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