Smoke taint reemerges as big threat for North Coast wine industry

June 01-- Jun. 1--The endless barrage of wildfires throughout California is beginning to take a toll on the wine industry, specifically with grapes being tainted by smoke.

The dilemma, which reemerged during last year's harvest, is forcing everyone in the sector to adapt -- especially smaller grape growers. They already are being pinched by industry consolidation, leaving them with fewer vintners to buy their fruit, and even less leverage in negotiating prices for the 2019 fall grape harvest.

That is especially the case for growers in Mendocino and Lake counties, where many are reeling from a tough 2018 when some farmers there had their fruit rejected by large wine companies such as Constellation Brands Inc. and Treasury Wine Estates because of smoke damage. They had little recourse to confront these large corporations.

Last year, Lake County growers lost at least $37.1 million from smoke-tainted grapes from the Mendocino Complex fires. The county's overall crop was worth $74 million last year. Mendocino County officials said they don't have an estimate on their losses from smoky grapes in the $138 million 2018 crop. Sonoma County vineyards were spared last year. In 2017, almost all the grapes were picked before the widespread October fires.

The vexing problem: The wine industry has no unified standard for what constitutes a grape tainted by smoke or even the protocols for testing, making it difficult to tackle the challenge. Growers and wineries now are revising customer contracts with language to try to prevent what happened last year to some Lake County growers.

Making matters even worse, many North Coast growers didn't have federal crop insurance last year or had policies insufficient to recoup their costs related to smoke damage. Many are trying to correct that oversight this year to minimize losses.

"It's a huge concern," said Jeff Bitter, president of the Allied Grape Growers of California, a grower-owned marketing association. "Until we learn more about wildfires and its effects on grapes and all that, it's just too risky to go about it without a safety net."

They will get a little help, albeit after the fact, from a federal bill expected to pass Congress in June. It would give the U.S. Department of Agriculture $3 billion in emergency funding to allocate to U.S. farmers who encountered all types of natural disasters the past two years. A fellow grape grower himself, Rep. Mike Thompson, D-St. Helena, said the bill "protects our local, small family agricultural producers" in the North Coast.

Still, there's uneasiness within the grower community about the path forward given the reality of more fires. Case in point is Mike Boer, a Ukiah Valley grape grower whose family has owned roughly 45 acres since 1890. He also leases another 40 vineyard acres nearby. That latter property was across the street from where the Mendocino Complex fires first started.

He harvested 520 tons of grapes last year for his clients. But 180 tons of that total -- chardonnay and merlot -- from the leased land was rejected by Constellation Brands after the company's testing showed too high a level of guaiacol, a phenol compound from smoke that accumulates on the skin and can seep into the pulp of grapes. Guaiacol and another related compound, 4-methyl guaiacol, can be released during fermentation and cause wine to have an aftertaste that evokes aromas and flavors similar to cigar smoke.

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