Chile’s biggest winemaker suspends production to assess damage to operations from earthquake

Quake stops production for biggest Chile winemaker

SAO PAULO — Chile’s biggest winemaker said Monday that is stopping production for at least a week because the mammoth earthquake hit the nation’s wine-growing heartland hard, damaging wineries and the transportation network.

Several of Concha y Toro’s major wineries sustained serious damage in the most devastated zone of Chile, hundreds of kilometers (miles) south of the capital, Santiago, the company said in a statement.

“The area with the largest impact is the heartland of wine production,” said Concha y Toro. “Our company, as well as the rest of the industry, have been heavily impacted by this catastrophe.”

The company suspended all production and shipping for a week in a zone where the major north-south highway was severely damaged, alongside harm to seaports in the region that is expected to hurt Chile’s important seafood export sector.

“We have already been able to assess serious damage to some of our main wineries which are located in the worst affected areas,” Concha y Toro said. “This includes important loss in wine and production capacity. A more detailed assessment of the exact magnitude of these damages is currently being completed.”

American depository shares of Concha y Toro slumped 3.1 percent Monday on the New York Stock Exchange, and closed down $1.50 a share to $45.50. The shares trade under the name Vina Concha, as the winemaker’s formal name is Vina Concha y Toro SA.

Most of Chile’s vineyards lie south of the capital, where bridges fell, roads cracked and ports were swamped. Of the quake’s 723 victims, most were in the wine-growing Maule region that includes the port city of Talcahuano, now a mud-caked city of 180,000 devastated by a tsunami.

The Chilean government hasn’t yet calculated a damage estimate, but the Santiago-based research firm IM Trust research estimated the earthquake could cause between $4 billion and $8 billion in losses.

The quake’s devastation zone is home to numerous vineyards, paper and pulp mills, fishing towns that harvest everything from anchovies to shellfish, and ports for exporting fresh produce and farm-grown salmon.

“There’s damage to all the infrastructure needed for exports, like ports and highways,” said Jan Cademartori, a business professor at Chile’s Catholic University of the North.

Concha y Toro is Chile’s largest wine producer and exporter and also has operations based in Argentina. It had sales of $590 million in 2008 and shipped 26.6 million cases of wines to consumers in 131 countries.