Reflections on the Omnipresent Successes and Frauds in the Wine Industry
The history of wine production and distribution is one of extreme dedication to fine wines and of notorious frauds and scandals. While these events are somewhat polarized, there are far greater sensational tales of excess and avarice strewn throughout the pages of the thousands of years of wine production than there are of the numerous winemakers and distributors who have quietly contributed to the successes of the modern day wine industry.
For every success story of a family-owned winery that reached recognition following generations of toiling in the vineyard and winery, there are multiple tales of individuals bent on get-rich-quick schemes that capitalize on the gullibility of wine connoisseurs and consumers.
I’ve been reporting on a number of these successes and frauds since I began penning this column nearly 10 years ago.
One of my favorite success stories is that of Joe Wagner. A fifth-generation California winemaker, Wagner experimented with his brand in 2006, attempting to make his own distinctive mark in the wine industry. Utilizing uncanny marketing skills, he built his brand, Meiomi Pinot Noir, into one of the hottest-selling Pinot Noirs in the United States in just six years. In 2015, he sold the brand name to Constellation Brands for $315 million. That’s right, the brand name – no owned vineyards and no capital assets.
I’ve also reported on several frauds.
Counterfeiters permeate the landscape of the high-end collectors market. One of the most famous was Rudy Kurniawan, who bilked wealthy collectors of tens of millions of dollars, simply by ingratiating himself into their inner circle with genuine rare and sought-after wines, then blatantly selling them seemingly identical wines made in his kitchen. I recommend a recently published book that brilliantly documents Mr. Kurniawan’s exploits – “In Vino Duplicitas: The Rise and Fall of a Wine Forger Extraordinaire,” written by Peter Hellman, a fellow member of the Wine Media Guild. A documentary movie I enjoyed – “Sour Grapes” – is available on Netflix.
Frauds by criminals intent on profiting at the expense of the unsuspecting average consumer are numerous and legendary. In 1985, Austrian wine producers added diethylene glycol (a toxic chemical used to produce anti-freeze) to enhance the flavor and body of over one million gallons of wine. The perpetrators were discovered, arrested and convicted.
The following year, several producers in the Piedmont region of Italy were found to have tainted inexpensive table wines with the chemical methanol, which may cause blindness and death. As in the Austrian scandal, the perpetrators were discovered, arrested and convicted – but not before 20 consumers died and dozens more were hospitalized.
New frauds continually crop up, but rarely involving health risks. Just last week I read of a French company that perpetrated a fraud on unsuspecting consumers. The chairman of a large bulk-wine company, Raphaël Michel, was arrested for blending common table wines from various regions and selling them as premium wines from two famous French wine regions. The company’s business model is to buy grapes or fermented wine juice from grape growers in bulk, blend these wines and sell them onward to bottlers. It purchases from over 4,000 growers in the Rhône Valley, Provence, Languedoc-Roussillon, Chile and Argentina.
The company had a long, reputable history, dating to its founding in 1899. However, for the past four years it is alleged to have produced and sold over 40 million bottles of falsely labeled, lower quality, generic wines as originating from the highly regarded Côtes du Rhône and Châteauneuf-du-Pape regions. This has created turmoil in the market for these wines. Local producers are concerned for their ongoing reputation and viability; regulators are embarrassed; and consumers are reeling from the humiliation that they were duped into believing inferior wines had become their favorite premium wines.
Wine, by definition and history, is an ever-changing – and highly individualized – product that is judged in the eye of the beholder. Devious fraudsters will invariably find willing consumers with blindfolds firmly affixed.
Nick Antonaccio is a 40-year Pleasantville resident. For over 20 years he has conducted numerous wine tastings and lectures. Nick is a member of the Wine Media Guild of wine writers. He also offers personalized wine tastings and wine travel services. Nick’s credo: continuous experimenting results in instinctive behavior. You can reach him at nantonaccio@theexaminernews.com or on Twitter @sharingwine.
