French execs sell fake wine to US

February 17, 2010

, CARCASSONE, Feb 17 – A French court will rule Wednesday on a massive wine fraud case in which local producers are accused of selling millions of bottles of fake Pinot Noir to US wine giant E&J Gallo.

The 13 defendants, including executives from wine estates, cooperatives, a broker, wine merchant Ducasse and conglomerate Sieur d\’Arques, are accused of selling 18 million bottles (135,334 hectolitres) of fake Pinot Noir.

The wine was commercialised under Gallo\’s popular "Red Bicyclette" Pinot Noir label though made from far less expensive grape varieties.

At an earlier court hearing on January 25, public prosecutor Francis Battut asked for tough sentences, including heavy fines, suspended jail sentences and up to 12 months in jail for one of the defendants.

All but two senior executives have admitted their guilt.

Scandal erupted in March 2008 when France\’s fraud squad, the General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF), became suspicious during an audit at wine merchant Ducasse.

Ducasse had been buying Pinot Noir at 58 euros per hectolitre when the official market price was 97 euros, and generic local grape varieties were selling for 45 euros.

Meanwhile, the volume of wine from the renowned Pinot Noir grape being sold to Gallo far exceeded the possible supply from the region.

On the basis of a year-long judicial investigation, the defendants were accused of substituting wine made from less expensive local grape varieties for the Pinot Noir, which is popular on the American market.

The swindle allegedly began in 2006 and ended in 2008.

"Our contractual agreement with our supplier guarantees all wines supplied meet French regulations, including the Pinot Noir in question," said Susan Hensley, vice president of public relations for E&J Gallo.

"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," she added

"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 found guilty, the defendants will enter the hall of infamy of great wine scandals, while undermining the credibility of fellow French winegrowers.

"What worries me the most for my country are the economic consequences," prosecutor Battut said in a telephone interview with AFP.

"If Americans lose confidence in French wine production, particularly the Languedoc region, which is already going through a serious crisis, the consequences could be terrible."


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