Pinot Noir scam hits California

The world wine trade is having a field day with the latest wine scam; the sale of 3.6 million gallons of wine labeled as French Pinot Noir that was not.

A dozen French wine producers and traders have been convicted, fined and given suspended jail sentences for selling the equivalent of 18 million bottles of fake Pinot Noir to at least two of the major U.S. wine merchants, E&J Gallo and Constellation Brands.

The volume represented in this scam is the equivalent of 23,000 tons of California Pinot Noir from roughly 5,000 acres of grapes. Using the weighted average paid for 2008 California Pinot, California growers were defrauded out of roughly $110 million.

The scandal has been labeled by the wine press as “Pinot Noirgate, the Pinot that wasn’t” and the wine world’s “Schadenfreude of the Year.”

A lot of the fake Pinot went into Gallo’s widely popular Red Bicyclette Pinot Noir French wine, which was foisted on the unsuspecting public in the wake of the popular film “Sideways.” Gallo’s Vice President Susan Hensley released a statement that the world’s largest winery was “deeply disappointed” with the guilty verdicts for the French crooks. Gallo imported “less than 20 percent” of the total faux Pinot, according to Hensley. That’s only 720,000 gallons or the equivalent of the production from more than 4,500 acres of California vineyards. Gallo “is no longer selling any of this wine to customers,” according to Hensley.

There was no mention that Gallo analyzed the wine to see if it was Pinot Noir. Most wine pundits find it hard to believe Gallo did not test the wine for authenticity.

Constellation told the European wine media it tested the Pinot from the French crooks and “found it to be Pinot Noir.” Of course, the suspected phony Pinot shipped between 2004 and 2008 is no longer available for testing, according to Constellation. Constellation said it is still selling wine from the convicted French supplier.

The wine press has called the scam one of the “most far reaching scandals to have hit French vineyards in years.” This scam was almost too easy for the French government to uncover. One of the crooks sold more Pinot than the entire region produces at prices much less than the going bulk rate prices for Pinot.

The U.S. Bureau of Alcohol, Tobacco and Firearms and Explosives (ATF) was quoted as saying it was not involved because the fraud did not happen on U.S. soil. Oh really? However, ATF said it would investigate if they found Constellation and Gallo were aware of the scam by French suppliers and knowingly sold fake Pinot to U.S. consumers.

This all goes to the fact that almost 33 percent of the 323-million-case U.S. market was imported wine in 2009. The bulk-wine equivalent of 25 million cases of wine was imported by California wineries last year.

The French discovery of the massive fraud was like the proverbial blind hog finding an occasional acorn. Bet ATF could root out a nut or two. It would be worth a $110,000 million effort. California grape growers struggling to find homes for their grapes year after year would be grateful. At least they would know they are being undercut by wine in the bottles matching the labels.

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TAGS: Grapes
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