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Barton Brands Distillery incurred significant financial losses with the collapse of Warehouse 30 in Bardstown, Kentucky on June 22nd and July 4th, 2018. Current estimates show total costs in the range of $41 Million.
The collapse, on two occasions, led to tens of thousands of gallons of unsalable finished product leaking from damaged barrels and some of that leakage escaping the warehouse containment into the surrounding land and waterway. The barrels were damaged by falling from height, impact with each other and/or compression from being under the refuse. The barrels were stored in seven story warehouse which housed ~18,000 barrels at the time of the collapse. As a direct result of the collapse, Barton has received environmental fines for not repeating the leakage within the alloted time frame as well as for the actual leakage.
The ongong costs of this event are related to activities covering product recovery, when possible, damaged barrel and warehouse cleanup, and environmental cleanup. There will be further costs incurred to construct a replacement warehouse as well as the potential to repair the current warehouses once the collapse causes have been fully analyzed.
Cause and Effect Summary
The Barton Brands (Sazerac) Distillery incurred significant financial Losses on June 22, 2018 when a warehouse storing approximately 18,000 barrels of bourbon partially collapsed and again on July 4, 2018 when the remainder of the warehouse totally collapsed. As a result of the collapse, tens of thousands of gallons of bourbon leaked outside warehouse when approximately 5,000 aging barrels ruptured. At a sales price of approximately $150 USD/gallon, and 53 gallons/barrel, approximately $40 million of bourbon was lost.
Remediation costs and fines levied on company further add to the financial losses. Fines result from polluting a nearby tributary (killed >1,000 fish) when the spilled spirits flowed in, and a failure to report the leak in timely fashion. Sprits ran into the tributary because there was no permanent spill containment around the warehouse and temporary containment was not established until three and a half hours after the spill began. It is not known why there was no permanent spill containment around the warehouse, however it is likely due to the age of the warehouse and no containment requirements in place at the time of warehouse construction.
The initial warehouse collapse was due to a degradation in building integrity likely caused by a degradation in the foundation of the warehouse due to heavy spring rains. The side of the warehouse that collapsed on June 22 was located on a downward sloping hill. While the foundation condition at the time of the collapse is not known for certain, saturated soil and a fully loaded warehouse (the seven story warehouse contained 18,000 barrels stacked 3 high on rack) resulted in loading that overcame the strength of the foundation.
The second part of the warehouse collapsed on July 4 because lateral support was no longer present because of the previous warehouse collapse on June 22, and activities to shore up the second half of the warehouse had not yet started. Activities to shore up the second part of the warehouse had not yet started because of worker safety concerns.
(DISCLAIMER: This example is for illustrational purposes only and is NOT claimed to be the final, fully accurate RCA. Sologic was not privy to the information needed to complete a full RCA and as such, information was obtained from the public domain as of 2019. The solutions presented are for illustration purposes. No claims are made to whether any of the proposed solutions were adopted--they are intended to show the connection to causes based on the cause and effect chart constructed.).