Vintners scramble to retrieve wine from New Vine Logistics

North Coast wineries scrambled Tuesday to reclaim their wine from New Vine Logistics, a Napa wine storage and shipping company that ran out of cash and ceased operations over the weekend.

A skeleton crew was deluged with requests from wineries attempting to retrieve their inventory from the company?s American Canyon warehouse, where more than 130,000 cases of wine were locked up Tuesday while New Vine winds down its business.

Without access to the warehouse, some small wineries could run out of wine to sell this weekend as connoisseurs flock to the annual Auction Napa Valley, which attracts thousands of visitors from across the United States to the area?s tasting rooms.

?We are in a crisis mode. We really need access to that wine by Friday,? said Jean Hoefliger, winemaker and general manager for Alpha Omega winery in Rutherford.

Alpha Omega stored all of its wine at New Vine?s warehouse, and has only enough wine at its tasting room to last another two days.

?After that we are completely out,? Hoefliger said. ?We really need access to our wine. They are preventing us from selling our product.?

New Vine Logistics has not returned repeated phone calls from the winery, or responded to e-mails or a FedEx letter requesting information, Hoefliger said. A guard at the gate to its warehouse is not letting wineries in, he said.

?I?ve heard that a lot of their clients are in exactly the same problem that we are,? Hoefliger said. ?They don?t have a legal right to keep inventory from people.?

New Vine?s lender, Silicon Valley Bank, is not preventing the company from releasing wineries? inventory, said Carrie Merritt, bank spokeswoman.

A spokeswoman for New Vine said the company has already begun releasing some wine, although she could not say how much or when most winemakers could expect to get access to their inventory.

?They are going to work as fast as they can to get wineries their wine back,? said Charlotte Milan, a public relations specialist who started working with the company Tuesday.

The end of New Vine came after venture capital firms decided last week not to reinvest more money into the company.

Its closure has forced wineries and online retailers to quickly look for alternative ways of shipping wine to customers in other states, where alcohol shipments are tightly regulated by a complex web of laws.

The implosion of New Vine does not signal the beginning of a wave of closures within the direct shipping industry, said Larry Dutra, president of Adams Wine Group, which owns Pack n? Ship, a Windsor-based wine shipping company.

?New Vine was a casualty of too much debt,? he said. ?It?s not fair to say that direct shipping is doomed. If anything, customer direct shipping is becoming more liberalized and we?re seeing growth in that space.?

New Vine was founded in May 2001 by wine industry, high-tech and transportation veterans. It developed technology and systems that allowed wineries and online retailers to ship directly to consumers in 44 states.

New Vine had been losing customers during the past year in large part due to a pattern of mismanagement, according to a former New Vine manager and Larry Chandler, who helped manage several wine retail Web sites and now runs the wine industry blog, www.overabarrel.net.

One persistent problem involved bungled wine shipments, according to Chandler and the former New Vine manager, who spoke on condition of anonymity. New Vine shipped the wrong wine, or too much wine, or not enough wine to customers of its winery clients, they said.

?They were losing wine,? said Chandler, who broke the news of New Vine?s closure using his Twitter account. ?I personally received 2? free cases of very expensive wines because of their mistakes.?

Calls to the company?s founder, Katie Hoertkorn, were not returned Monday or Tuesday. In a statement, she vowed to keep customers and shareholders apprised of the company?s next steps.

?We deeply apologize for the situation, and we pledge to work with our customers to make as smooth and expedient shipping transition as possible,? Hoertkorn said.

Boutique wineries such as Alpha Omega are more affected by the closure than larger wineries, which usually have on-site storage with ample supplies of wine.

?It?s not anything that is going to impact our business,? said Allison Simpson, spokeswoman for Foster?s Wine Estates.

About 34 employees continue to work at New Vine. Yet none were paid for working last week, creating a concern that employees might not get paid for working this week, according to the former manager.

?If Friday comes and goes without pay, I think people will be gone,? said the employee, who left the company this week. ?If that happens, it?s going to be tough for wineries to get back their wine.?

The company laid off about 80 of its 110 employees on Friday.

Silicon Valley Bank is still providing financial support to New Vine to help it close down in an orderly fashion, Merritt said. Certain parts of the company might be resurrected, she said.

?I understand that there are numerous third parties that have come forward to work on alternative solutions,? she said.