Abstract

Several mitigation techniques and initiatives such as the ‘Good Practice Manual’ have been proposed to reduce the earthquake damage in wine barrels stacks. However, a common practice in most wineries is to restack the barrels in the same way as before the earthquake, mostly because the elevated costs of implementing the mitigation measures. Therefore, the barrel storage facilities are still highly vulnerable to earthquake damage and similar damage costs are expected in future seismic events. This study conducts a cost-benefit analysis of alternative seismic risk mitigation methods of wine barrel stacks. The Chilean wine industry is presented as an illustrative case study, in which performance metrics such as the expected annual loss (EAL) and the probable maximum loss (PML) are computed for wineries at different locations. The systematic procedure for evaluating decisions related to strategic risk management is divided in five steps: (1) To characterize a stochastic set of events collectively exhaustive and mutually exclusive, that describe the spatial distribution, the annual occurrence frequency and the aleatory variability of ground motions at the sites of interest, (2) To define exposure of wine barrel stacks at risk, (3) To compute vulnerability functions of barrel stacks with and without seismic mitigation measures, (4) To carry out a probabilistic seismic risk analysis taking into account all locations of wine barrel stacks in Chile, and (5) To perform a cost-benefit analysis assuming current condition and different seismic mitigation costs and actions. This analysis can be implemented at three different levels: i) a comparative analysis of vulnerability functions of individual wine barrel stacks considering the mitigation measures, ii) a comparative analysis of PML (implicitly loss exceedance curves) and EAL considering current condition and different mitigation alternatives of wine barrel stacks, and finally iii) a cost-benefit analysis (loss reduction due to mitigation measures). This is required in order to estimate the benefits of mitigation actions assuming that economical resources are limited. By computing seismic risk within a consistent framework, this study shows the value of cost-benefit simulations for defining the best mitigation strategies and allowing decision-maker allocate the economic resources. Another benefit of this approach is that the information to decision-makers is presented in an easier and transparent way even if they are not familiar with formal risk studies.