This investigative report by Slate’s wine columnist, Mike Steinberger, examines the retailer allegedly at the center of a multimillion dollar fraud rippling throughout the rare wine world. Manhattan-based Royal Wine Merchants apparently provided its clientele with highly desirable wines that were later deemed fakes and traced back to Hardy Rodenstock, a supplier suspected of creating counterfeits such as “the so-called Thomas Jefferson bottles.” A lawsuit filed by one collector has since highlighted the connection between the two enterprises, revealing that “Rodenstock shipped 818 bottles of wine to Royal between 1998 and 2008.” According to Steinberger, “Many industry insiders… believe that the Rodenstock invoices prove that the rare wine business has indeed been polluted by fraud.” Steinberger meticulously details the voyage of one fake vintage in particular – a magnum of 1921 Château Pétrus – which changed hands several times and left a glut of litigation in its wake. Although a…
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According to a news source, a putative class action has been filed against E&J Gallo Winery alleging that it falsely labeled and sold its Red Bicyclette® wine as Pinot Noir when the wine was “illegally cut with cheaper Syrah and Merlot grapes.” The action, reportedly filed in Los Angeles Superior Court, follows news that wine makers in France were sentenced for selling the cheaper wine to the company as pinot noir. Additional details about the French scam appear in issue 338 of this Update. Meanwhile, the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) has reportedly been investigating the matter with French authorities and may also take action against U.S. wine importers. The bureau was quoted as saying, “TTB is waiting for an official translation of the court documents and has begun investigations to determine the appropriate course of action to take regarding the American importers of these mislabeled…
A court in Carcassonne, France, has reportedly found French winemakers and traders guilty of deliberately and repeatedly mislabeling wine as a more expensive grape variety to get a better price from E. & J. Gallo under its Red Bicyclette® brand. French customs officials apparently discovered the swindle when they found that the amount of “pinot noir” sold to Gallo far exceeded what the region produced. According to a news source, the scam more than doubled the miscreants’ profits, which totaled some €7 million for 18 million bottles. The fines imposed ranged from US$2,050 to US$247,050, and the suspended jail sentences ranged from one to six months. The judge was quoted as saying, “The scale of the fraud caused severe damage for the wines of the Languedoc for which the United States is an important outlet.” A defense attorney reportedly said that no American customers complained about the fraud. See BBC News,…
The First Circuit Court of Appeals has upheld an injunction against the enforcement of a Massachusetts law that regulated wine shipments in a manner that changed “the competitive balance between in-state and out-of-state wineries in a way that benefits Massachusetts wineries and significantly burdens out-of-state wineries.” Family Winemakers of Cal. v. Jenkins, No. 09-1169 (1st Cir., decided January 14, 2010). The statute at issue gave small wineries (those producing 30,000 gallons or less of grape wine annually) the most options for selling to consumers, either by direct shipment or through wholesalers and retailers. According to the court, most Massachusetts wineries are small wineries. Large wineries could sell either through wholesalers or by applying for a special license to ship directly to consumers; they could not do both. Apparently, Massachusetts has no large wineries. A group of California wineries and Massachusetts residents challenged the law, claiming it violated the Commerce Clause by effectively…
Francis Ford Coppola Presents, LLC has filed a complaint in a California court against a company that makes corks, screw caps, bottles, and other packaging, alleging that defects in the bottles and screw caps purchased for the winery’s Encyclopedia® collection of wines caused the degradation or destruction of 55,000 cases of wine. Francis Ford Coppola Presents, LLC v. Vinocor USA, Inc., No. 26-50585 (Cal. Super. Ct., Napa Cty., filed November 23, 2009). The winery alleges breach of contract, the implied covenant of good faith and fair dealing and the implied warranty of fitness; fraud in the inducement; negligent misrepresentation; negligence; and “for money had and received.” According to the complaint, the affected wine collection “was crafted and designed to be a collection of wines aimed at educating consumers on understanding how geography, history, food and religion, to name a few, all contribute to the making and enjoyment of wine. In…
The French National Institute for Agronomic Research has released the results of a market survey reportedly suggesting that European consumers cannot distinguish between wines with 9 to 11 percent alcohol content by volume and those with 12 to 14 percent. Twelve scientific teams have apparently “demonstrated that producers could reduce the alcohol content by up to three percentage points without an ordinary drinker noticing,” according to a June 22, 2009, article in The London Times. “In blind tastings, the French consumers like quality wines with a reduced alcohol content as much as standard wines,” stated the institute’s report. The results have challenged traditional wine mores in Europe, which previously prohibited a method used in the United States and Australia to remove excess alcohol from finished products via osmosis. Wine producers, however, have asked the European Union to approve this process, known as de-alcoholization, in light of slumping wine sales and…
A European Union (EU) ban on U.S. wines violating rules about the use of terms such as “clos” and “chateau” apparently took effect in March 2009. With strict regulations about the use of words like “Champagne,” “Chablis” and “Burgundy,” the EU has been feuding with the United States at least since 2002, and has ended a three-year waiver extended to U.S. vintners in 2006. The United States considers these terms to be “semi-generic,” descriptive of wine styles and not French geography. A number of Sonoma County, California, wineries have reportedly been affected; they include Clos du Bois, Chateau St. Jean, Clos Du Val, and Clos Pegase. According to a news source, the term “clos,” which means “enclosure,” can appear on a French wine label only if the vineyard using the term produces and bottles its own wine. See Miami Herald, March 27, 2009. Meanwhile, a study published in March 2009…
