French Winemakers Convicted for Duping Gallo

NICE, France (Feb. 17) -- In a decision that makes American vintners look strangely gullible, a court in southwest France convicted 12 French winemakers Wednesday in a scam that involved selling millions of bottles of fake pinot noir wine to the U.S. wine giant E&J Gallo.

The case involved wine sold under the Red Bicyclette label, which became hugely popular in the United States after the 2004 wine country comedy film "Sideways." The verdict was not a surprise, given what French authorities uncovered about the nearly $10 million con that ran from 2006 to 2008.

In one of the biggest scandals in recent history to involve French vineyards, bottles labeled as pinot noir were actually cut with less expensive merlot or shiraz by the French winemakers. They were busted by authorities in their own country -- not by Gallo.

Sharp-eyed French fraud investigators in 2008 noticed the high volume of alleged pinot noir coming out of a region where the statistics for average yearly production are well known. They also wondered why some of it was being purchased below market cost.

After a yearlong investigation, a court in Carcassonne ruled that the defendants -- which include executives from vineyards and cooperatives, the wine merchant Ducasse and conglomerate Sieur d'Arques -- were guilty of selling about 18 million bottles of falsely labeled wine. They were fined between $4,000 and $250,000, and given suspended jail sentences of between one and six months.

The judge in the case said "the scale of the fraud caused severe prejudice to the wines of Languedoc in the United States."
However, a lawyer for Sieur d'Arques, Jean-Marie Bourland, told Agence France-Presse, "There is no prejudice. Not a single American consumer complained."

That doesn't speak well for the palate of American consumers of inexpensive wine. But it is particularly embarrassing for a huge wine company like E&J Gallo, founded in 1933 by Ernest and Julio Gallo in Modesto, Calif. They got suckered into paying relatively top dollar for inferior wine and ended up dupes just like their unwitting customers.

"How no one at Gallo saw anything untoward is astounding," says wine critic David Flaherty. "How this stuff went all the way through operations and into bottles people were drinking from Ohio to Texas just amazes me."

Gallo released a statement Wednesday saying the company was "deeply disappointed" that Sieur d'Arques was guilty of selling falsely labeled French pinot noir. The company is no longer selling Red Bicyclette.

But the statement went on to say that "based on available information ... Gallo imported less than 20 percent of the total and is no longer selling any of this wine to customers. We believe that the only French pinot noir that was potentially misrepresented to us would have been the 2006 vintage and prior."

The two main spokeswomen for Gallo did not respond to repeated calls by AOL News for further comment. A spokeswoman for Gina Gallo said she was out of the office and not available for immediate comment.

Last year, Gina Gallo, a third-generation winemaker at Gallo and the granddaughter of Julio Gallo, married Jean-Charles Boisset, president of Boisset Family Estates, France's third-largest wine company.