Wineries left red-faced over fraud

Wineries left red-faced over fraud

Wineries and merchants in southern France have been found guilty of duping buyers, including E&J Gallo Winery, into purchasing fake Pinot Noir wine at inflated prices.

Ringleaders of the mass fraud operation were given suspended prison sentences and fines by a court in the French city of Carcassonne yesterday (17 February).

Wine merchant Sieur d'Arques, a supplier to E&J Gallo Winery, must pay back EUR180,000 (US$244,000), the largest fine handed down by the court.   
 
Sieur d'Arques was one of several local businesses, including wine merchant Ducasse and cooperative Montblanc, who passed off cheap wine as Pinot Noir between 2006 and 2008. By selling the cheaper wine at inflated prices, it is estimated that those involved made an extra EUR7m.

Gallo bought wine from Sieur d'Arques for its Red Bicyclette wine brand.

"We are deeply disappointed to learn today that our supplier Sieur d'Arques has been found guilty of selling falsely labelled French Pinot Noir as recently as March of 2008," said Gallo today.

The California-based wine firm conceded that it had fallen foul of the fraud ring, but said: "Based on the available information of the Pinot Noir that the French courts have investigated, Gallo imported less than 20% of the total and is no longer selling any of this wine to customers." 

It added: "We believe that the only French Pinot Noir that was potentially misrepresented to us would have been the 2006  vintage and prior."

There are concerns that some mislabelled Pinot Noir may still be on the marketplace in the US. Gallo said that it would "work with the appropriate authorities to determine any next steps required".

French authorities first became suspicious of the fraud during a routine audit at Sieur d'Arques, where they noticed that more Pinot Noir was being sold than had been bought in.

Winemakers in Languedoc Roussillon have taken legal action to defend the region's reputation.

The Confédération Paysanne union, which represents many wineries in the region, was a civil complainant in the case and warned that there is no excuse for the fraud, "whatever the disturbances on the international market".

Another complainant in the case, the Vins de Pays d'Oc wine union, is to receive EUR5,000 in damages from all 12 guilty parties.