YOUR WINE COLLECTION IS AT RISK!

In recent weeks, hurricanes and fire have destroyed tens of millions of dollars worth of wine. Ranging from rare library collections to restaurant inventories, thousands of cases of wine have been lost. Is your collection next?

None of us like to contemplate this, but when the unthinkable happens, will you be prepared to support your claim of inventory value? Will you be able to demonstrate to your insurance company - or tax/financial person - to their satisfaction - the value of your collection? Will you be able to support your contention that you recently added $12,000 worth of Screaming Eagle Cabernet to your cellar? Will you have records - with timestamps - showing when these items were cellared? Will your records contain detailed information about the vendor, thereby readily providing corroboration of your claim?


Realistically speaking, you cannot fully mitigate the effects of a Katrina -scale natural disaster. You can, however, protect your wine investment with accurate and defensible inventory records. Beyond matters of insurance and potential financial loss, how will you rebuild your collection without a detailed record of what you had? Can you send that record electronically, at your discretion, to your insurance company?

Where will the next big one occur? When? Will you be a victim? After all, the probability is low - Right? Another Katrina? Or Rita? Or Wilma? Or fire - earthquake - tornado - act of terrorism? It is more than a matter of probability. It is an Expected Value [EV] problem. The probability of an occurrence is only part of the equation. The value of the occurrence must also be considered. For example, let's say the probability of a particular catastrophic event is 1 -in -1000 [or 0.001]. If your wine collection is worth $100,000, then the EV is 100. As you can see from this simplistic example, as either the probability or the value increase, the EV increases accordingly, as does your loss. And it is more than a matter of IF - It is about when and how bad. It is all the time and everywhere!

There is much that can be done to protect your collection from all manner of adversities, ranging from theft, to fire, to flood. Proper design and construction techniques can do much to mitigate risk. The use of properly designed, installed and maintained monitoring, alarm and control technology is important, especially for larger collections where the cost can be more easily justified. However, none of these measures offer absolute protection. The recent warehouse fire in Vallejo, CA bears witness to the tragic consequences of "state -of -the -art storage" being cruelly circumvented by human actions. Unfortunately, many smaller wineries with wonderful products have lost their entire stocks as a result of this fire. One winery affected by the Vallejo fire lost their entire 2003 production - 6000 cases worth $3.5 million. Beyond the immediate financial impacts lies the prospect of loss of market position.

Mother Nature can be equally cruel and unpredictable. There are an estimated 1000 restaurants located in the greater New Orleans area, all with wine collections. Much of this inventory has been adversely affected if not destroyed outright. Distributors have lost tens of thousands of cases of wines of all prices and descriptions, many due to heat resulting from power failure. Currently in Florida, it is estimated that it will be a month before electrical service is completely restored. Prized items such as bottles of 1989 Chteau Latour valued at over $500 have been lost. And there are the folks in New Orleans whose losses include a bottle of 1946 Chteau Latour - a wedding present that they were saving to drink on their fifth anniversary - which was October 24th. Are you prepared?

We can help. The Cellar CerveauTM Wine Cellar Management Solution will not mitigate the physical disaster, but its comprehensive tracking and reporting capabilities provide you with accurate, up -to -date details about your wine inventory - Regardless of size!

Additionally, Invictus Wine Group's Disaster Mitigation and Recovery resources are available to assist you in planning new storage or assessing existing facilities and plans. Effective Planning and Response is multi -faceted, and it can be a complex undertaking that may seem unnecessary or too costly. Our experience has shown that more often than not despair quickly replaces financial concerns in the aftermath of such disasters - whether individual homes or businesses or large -scale disasters. Suddenly, the value of the money that was saved by not being proactive diminishes in light of the losses.

Whether winery, distributor, retailer, restaurateur or consumer, everyone is vulnerable to the vagaries of natural disasters and the actions of people. Don't wait. Don't be the next victim!

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