The Pinot Noir Wine Scam

A couple of weeks ago, in the south-western town of Carcassonne, twelve people associated with the local wine industry were convicted of a lucrative scam in which E&J Gallo, the leading US winery, was conned into buying 18m bottles of plonk which had been repackaged and sold as more expensive pinot noir wine.

In one of quite a few scandals to have hit French vineyards in recent years, the executives from the Languedoc-Roussillon region were found to have fraudulently made a €7m (£6.1m) profit over a 30 month period until March 2008. Overall, 13.5m litres of fake cheap wine were shipped to the US to be drunk by unsuspecting consumers. Gallo, founded by brothers Ernest and Julio following the repeal of prohibition in 1933, is now the biggest family-run winery in the US, known internationally as the leading exporter of Californian wines and within the industry as the world's most powerful wine brand.

The court sentenced Claude Courset to a six month suspended jail sentence and a fine of €45,000. Courset was head of Ducasse wine merchants, who acted as an intermediary between local producers and a conglomerate which resold the wine to Gallo.

Other defendants, including eight co-operative wine cellars from the surrounding Aude and Hérault regions, were fined according to their responsibility in the affair.

Amazingly, Gallo never filed a complaint but during an audit of Ducasse in March 2008 investigators noticed that the business was buying pinot noir from local co-operatives for €58 a hectolitre despite a going rate of €97. Their suspicions were also raised by the sheer volume of pinot noir being produced in the region. Historically, Languedoc- Roussillon produced around 50,000hl a year. Suddenly, it had seen a dramatic upturn. Where, the inspectors wondered, were all the grapes coming from?

The answer was simple: the bottles being labelled pinot noir were in fact wine made from merlot or shiraz, less expensive grapes in plentiful supply around Carcassonne. Eight co- operatives were in on the con, supplying Ducasse with the produce; Ducasse then – for an estimated profit of €3.7m – sold the wine on to Sieur d'Arques, which resold it in bulk to Gallo.

American consumers, believing they were tasting the intoxicating red feted with such style in the Oscar-winning 2004 wine comedy Sideways, were none the wiser.

The revelations however, were a blow to the Red Bicyclette brand, launched in 2004 and made instantly popular in the aftermath of Sideways, the Hollywood film which fuelled a craze for pinot noir in the US. The surge in demand came as a godsend for French growers desperately trying to fight off competition from New World wines.

The realisation that vast sums could be made by labelling plonk as pinot noir for the US market was, for some, too much to resist and the inability of so-called experienced wine drinkers, who obviously couldn’t tell plonk from a good vintage just helped the fraudulent profits roll in.