Sour grapes! Gallo victim of wine world's biggest con

A French court hears claims that US winemakers Gallo were duped into buying millions of gallons of phoney pinot noir

Greg Walton
Sunday 07 February 2010 01:00

E&J Gallo's 2007 Red Bicyclette Pinot Noir was said by the company to have "the dark fruit aromas and flavours of black cherry and ripe plum". But when a French court case concludes in 10 days' time, the American winery may experience rather different sensations. The bouquet of a smelly deal, perhaps, or the aftertaste of very sour grapes.

For Gallo – and its customers – may well have been diddled by what is alleged to be one of the biggest cons ever perpetrated in the murky and uncertain world of wine. Thirteen people including executives from two wineries, five co-operatives, négociant Ducasse and conglomerate Sieur d'Arques have been charged with selling Gallo millions of dollars' worth of wine which was labelled pinot noir, but which, if truth be allegedly told, wasn't. The quantity involved is staggering – 3.57 million gallons, enough to fill 16 million bottles, or 460 oil tankers.

The arrests of the French wine trade folk followed an investigation that lasted more than a year, according to online editions of the wine magazine Decanter.

Between 2006 and 2008, Sieur d'Arques allegedly sold 135,000 hectolitres of wine labelled pinot noir, but was, says, actually wine made from much less expensive grapes. Gallo apparently paid about €4m (£3.5m) for the privilege.

Investigators became suspicious after realising that the amount of pinot noir being exported from the Languedoc-Roussillon area far exceeded historic levels. France's public prosecutor has called for prison terms of up to 12 months in jail for those found responsible for the deception as well as hundreds of thousands of euros in fines for the companies involved.

According to court reports in La Dépêche, the Toulouse newspaper, jurors in Carcassonne have heard how local wine dealer Ducasse acted as an intermediary between eight grape suppliers and the major winemaker Sieur d'Arques, which then allegedly sold on in incorrectly labelled bottles to Gallo in 2006 and 2008.

A former Sieur d'Arques employee has testified that she, along with the company's financial director, knew that a lower quality grape was being used. The Sieur d'Arques's director claimed that he "did not remember" after the former employee produced emails to the court apparently implicating him and the group's chief executive in the alleged fraud. The court has been told that using lower quality grapes could have saved "several million euros", reports La Dépêche.

Gallo's winemaking notes says the 2007 Red Bicyclette Pinot Noir was sourced from several areas within the Languedoc-Roussillon region in southern France. Susan Hensley, a spokeswoman for the California-based winery said in an email to Reuters: "Our contractual agreement with our supplier guarantees all wines supplied meet French regulations including the pinot noir in question. At this time it is still a question for the French courts and French and US regulatory authorities to determine whether the wine in question was misrepresented to us. When more information becomes available to us from the authorities we will move quickly to ensure that the trust people place in our company and our wines is not put at risk."

If the defendants are found guilty, then the 2010 Pinot Noir Affair will be laid down in the capacious cellars of vintage cases. Already gathering the patina of dust essential to all fine wine scandals are: a constituent of antifreeze added to Austrian wine (1985); Italian table wines made of water, methanol, plus the magic ingredient of a little real wine for flavour (1986); the great mislabelled Bordeaux Case of 1989; sauvignon blanc fortified with green peppers and synthetic methoxypyrazine (2005); and sugar added to Beaujolais (2007).

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