by Mark Scaramella, February 19, 2010
The worldwide wine industry is abuzz with the recent conviction of a French wine combine which defrauded Gallo Wines by delivering at least 18 million bottles (the equivalent of 460 oil tanker loads) of “cheap French red table wine” (blended with with cheaper merlot and syrah grapes) and calling it “pinot noir” for “at least three years,” presumably ending in 2007.
The perps included well-known wine dealers Sieur d’Arques and Claude Courset of the Ducasse wine traders and executives from various wine estates, cooperatives, a broker, and two wine merchants. They were ordered to pay several hundred thousands dollars in fines, a small percentage of the millions they allegedly made in the scam.
In 2006 the demand for Pinot Noir in the United States increased dramatically, so the producers and traders from the Languedoc wine region in France, finding themselves short of pinot noir wine, began to cut their Pinot Noir with cheaper wine to fill Gallo’s huge orders and comply with Gallo’s strict price controls.
(Gallo, like Wal-Mart, sets strict price and delivery standards and even demands the accounting records of their suppliers and sub-suppliers to see if there’s more money to squeeze out of the vendors. This generally translates into corner-cutting in all the products WalMart buys and sells, particularly the stuff they get from China. And WalMart, like Gallo, likes it when their vendors and suppliers get blamed in those rare instances when a problem goes public, even though the price and delivery pressure these big retailers impose is frequently a big factor in the cheap, and sometimes unsafe, practices and products. If a supplier doesn’t meet Gallo’s or WalMart’s price and delivery requirements, they quickly switch to someone even hungrier for the business who will.)
According to press accounts, the French calculated that the convicted French wine sellers earned a total of nearly $9.5 million in the swindling scheme, making their fines appear more like fees or bribes.
Like most winemakers, Gallo has various “brands” at various price points. In the case of this “pinot,” it was Gallo’s popular “Red Bicyclette” line of mid-priced wine which was adulterated with the cheaper wine.
Besides the fact that Gallo pretty much sells various versions of “cheap red table wine” anyway, the most interesting aspect of the case is that apparently none of Gallo’s millions of US customers noticed the difference.
At one point, an attorney for one the convicted swindlers told the French judge, “There is no harm. Not a single American consumer complained." Another attorney said his clients had “delivered a wine that had Pinot Noir characteristics.” The 2007 Red Bicyclette Pinot Noir in question, he said, exhibited "dark fruit aromas and flavors of black cherry and ripe plum."
Which is nice, except it was supposed to be pinot flavored, not fruit flavored.
Pinot, you may recall, became popular when oodles of American wine doofuses with their matching pastel sweatshirts with poodles embroidered on the front, flocked to the Pinot shelves and tasting rooms starting in 2005 because they wanted to emulate the wine doofuses portrayed in the “movie” Sideways.
This incident clearly proves that these pretentious low-grade snobs don’t know piss from pinot, no matter how expensive it is or what it says on the label.
Gallo knew this of course and was cashing in on the American doofus wine buyers by selling them the “pinot” they stupidly craved – and would pay extra for.
In fact, there’s no discernible difference between most basic wines as long as it’s not vinegar or laced with flavors like wine coolers. If you put a fancy label on jug or box wine you can sell it for pretty much whatever the market will bear. Nobody checks to see if what you say on your label is what’s in the bottle.
That’s why such wine brands as Two Buck Chuck and assorted other cheap wines are usually just as good if not better than the high priced spread.
There’s a lot of fraud in the wine collection business too. When “classic” individual bottles of wine go for $1,000 or much more, what’s to stop someone from trying to pawn off cheap wine in a fancy bottle with a fancy label? If even these specialized collectors can be regularly ripped off, why not do it on the scale of hundreds of oil tanker loads?
Gallo reportedly paid about $5.5 million for the “pinot,” which translates to about 30 cents for the liquid content of one 750ml bottle. Then they bottled it and sold it for upwards of $12 per bottle. Which gives you just a little bit of an insight about how much mark-up there is in the wine business.
The only reason this scam was detected was a smart French customs official who compared the amount of pinot produced in the Languedoc region to the amount sold. The region sold more than twice as much pinot as was reportedly produced. Something didn’t add up. The French authorities then took at least a year investigating this “crime,” trying to find the cause of the discrepancy, during which time the scam continued unnoticed.
Apparently it is technically possible to detect one grape variety from another in wine using advanced DNA or infrared spectrometer testing, but that’s too expensive and impractical to conduct on a large production scale.
Gallo says that they didn’t really buy as much fake pinot as the French authorities say was sold. But that claim doesn’t seem credible either, although there are plenty of wine middlemen in the loop on both sides of the Atlantic who stood to profit. Who knows where it all really went?
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I remember a job I had as a liquor store clerk in the late 60s in Fresno, California. The owner got in a pallet load of relatively cheap sparkling wine (aka champagne) which he put in the front window with a sign that said, “Special This Week: LeJon Sparkling Wine, $1.99 per bottle.” Pretty cheap, even for the late 60s. It was pretty good champagne as far as I could tell. We sold maybe three bottles in that first week. So the proprietor changed the sign to read: “Special Order, Imported Champagne, $5.99 per bottle.” It was gone in less than two weeks.
I also worked as a lab tech at three large wineries in the Central Valley in those days – Roma Wines, Italian Swiss Colony and a few months at Gallo up in Modesto. Among other things I was amazed at how much plumbing and valves these big wineries had. They could pipe whatever they wanted wherever they wanted by simply adjusting valves. At Roma, in particular, I got a kick out of how many different wine bottles with fancy labels seemed to be filled out of the same tap. I have no idea how the valves were set but it looked like the same wine was being sold under many names and, presumably, various prices.
To be fair, smaller wineries probably don’t do that much blending and flavoring, and their wines may indeed be what they say they are, even if the price is aimed at Sideways yuppies.
But it’s unlikely that even the people who pay upwards of $50 per bottle really know if they’re getting $50 a bottle wine. They could just as easily be getting jug wine in a fancy bottle, priced just as arbitrarily for snob appeal as the LeJon champagne was.
If P.T. Barnum was alive today he’d be in the wine business.
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In a marginally related vein, here are some of the wine review comments I discovered at miscellaneous wine websites while researching this report.
It has a robust back end.
It has a nice Huckleberry Finnish
Petulent with a strong hit of beer.
Tastes like pepper spray flavored with Maneschevitz
Tastes like it was aged next to a pot smoker's stash.
Smooth with dark, earthy undertones of unwashed hippie.
Tastes like cow piss strained through a sweaty sock.
Does this stuff have human growth hormone added to it?
Notes of day-old picante with a hint of bathtub caulk.
And here are some actual, if completely unrelated, wine bottles and labels: