Wine scandals make for great gossip and entertainment. But they are no laughing matter to those who are defrauded.
As wine is a luxury product, scrupulous fraudsters can make a lot of money by falsifying it.
In fact, wine fraud is the main reason why the world needs wine laws. If wine laws didn’t exist, all sorts of junk could be used to make alcoholic beverages in wine colours.
Why wine laws are so important...
Wine laws are therefore, really important.
Wine laws protect consumers by ensuring that what they purchase is actually what the wine label says it is. For people who grow grapes, wine laws control the price of grapes – especially in prestigious regions.
Because at one point at the turn of the 20th century, rampant wine fraud was so egregious in France; authorities seized barrels that contained alcoholic liquid, called ‘wine’, that had no grape juice in it at all!
Falsified liquid that steals the names of famous quality wine regions – increases the supply of available wine to purchase. At the same time, it waters down the brand of the region. Consequently, it lowers the price that producers can fetch for a bottle of wine.
Wine professionals and authorities are very good at keeping wine quality high. In Old World countries such as France, Italy and Spain, they do this through complex wine laws that dictate what you can grow, how to grow it, and how to make the wine. If you understand these laws, you will know what the wine inside a bottle will taste like even before you pop the cork.
Now, here are 3 major recent wine scandals you should know.
3 Recent Wine Scandals You Should Know About
Sour Grapes Wine Scandal
Some of you may have watched the documentary called ‘Sour Grapes’.
In it, a man named Rudy Kurnaiwan falsified rare and expensive aged wines. He did this by master mixing inexpensive wines together. Afterwards, he re-bottled the wine with famous vineyard names and sold them as rare, aged wines at auctions.
How did Rudy Kurnaiwan get away with it for so long?
Since at least 2003, other collectors in California watched Kurnaiwan spend millions on rare bottles of wines. To many, it seemed reasonable to assume that Kurnaiwan’s cellar was a legitimate place to buy select wines.
And for Kurnaiwan, he tasted so many rare, aged wines; he was in a unique position to develop an unparalleled palate. He then used his talents to craft seemingly exceptional wines out of blending inexpensive plonk.
Besides, strangers were not the only ones duped by Kurnaiwan. His charm, generosity and humility meant he easily bamboozled friends into making counterfeit purchases as well.
At the pinnacle of this wine scandal in 2006, he made $34 million in two auctions alone.
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How did he get caught? Enter Laurent Ponsot
It was a 4th generation winemaker, Laurent Ponsot from Burgundy, France who exposed Kurnaiwan. Ponsot’s family makes Pinot Noir and Chardonnay from the most famous terroir in the world.
Top Burgundian wines like Ponsot’s are some of the most sought after, rarest and longest lived wines in the world. Made from Pinot Noir or Chardonnay, the domaine sells wines from many different villages in Burgundy including Grand Cru wines like Chambertin and Clos de la Roche.
Understanding how important Burgundy and terroir is
Terroir is the idea that wines take the flavour of the place the grapes are grown in. To Burgundians: the soil, the air, and even the people who tend to the fields contribute to a wine’s taste.
I must stress that this is not hyberbole or marketing in Burgundy. Burgundy is the birthplace of the concept. To Ponsot and his neighbours, terroir is sancrosanct and absolute.
To this end, the vineyards in Burgundy are mapped in minute detail to the changes in soil types and textures. The layers of the soil are important as well. How deep your subsoil is can be the difference between a $30 dollar bottle of wine and a $500 bottle of wine – even though the vines may only be a few feet from each other.
It goes to say that to a Frenchman, counterfeiting Burgundy is treason. It is a crime that is as harmful as murder.
So when Ponsot saw vast amounts of his rare wines appearing at auctions, suspicions grew. Sometimes these wines were from vintages or appellations that his family had never made.
Ponsot even worked with FBI investigators. Eventually they discovered the make-shift bottling operation in Kurnaiwan’s home.
What Rudy Kurnaiwan's scandal tells us
You should really watch ‘Sour Grapes’. They have video footage of the moment when Ponsot recalls his wines. At first, the room is loud and celebratory; most of the patrons have already drunk ample amounts of fine wine. At the shocking moment when Laurent recalls his wines, the party stops dead.
The auctioneer’s face – is it guilt? It’s as though Ponsot shouted the emperor has no clothes in front of all of his kingdom.
Overall, Kurnaiwan’s scandal is a perfect example of the importance of dealing with experts who have intimate knowledge of vintages, and producers of the wine world.
Jail Time and Fallout
What was the result of Kurnaiwan’s counterfeit wine scandal? He spent 10 years in jail. And it was just last year that authorities deported him back to his home country of Indonesia.
But during his tenure, Rudy duped many of the world’s rich and powerful.
And unfortunately for Rudy, Bill Koch was just one of those people. An energy executive and serious wine collector, Koch has spent 25 million so far trying to hold people who knowingly sell fake wines accountable.
Koch even won a $3 million US settlement against Kurnaiwan. One condition of the suit was that Rudy give up his sources and accomplices. He never did. And Koch hasn’t seen any of the money.
Do auction houses shoulder responsibility for selling counterfeit wines?
So, Koch also successfully sued Acker, Merrall and Condit, the auction house that sold most of Rudy’s wines. In the judges ruling, Acker must now submit all of its pre-1970 wines to an independent authority for inspection. Furthermore, they must accept all suspected counterfeit wines regardless of whether the house had printed ‘caveat emptor’ or ‘buyers beware’ clause in the catalogues.
Indeed, we should celebrate these consumer wins.
Yet, now that Rudy Kurnaiwan is headed home, many feel he will continue to make fraudulent wines.
[What are the best ways to keep an opened bottle of wine fresh? Read my 4 Wine Preservation Tools: Review and Buying Guide.]
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[Do you get headaches after drinkng wine? Read this post to find out why.]
Brunellogate Wine Scandal
Here, producers stretched out their wine by adding illegal grape varieties to the bottles.
What is Brunello di Montalcino DOCG?
By law, Brunello di Montalcino must be made from 100% Sangiovese grapes grown in the Montalcino area and aged a minimum of 5 years before it’s released for sale. The grape yields must be kept low to maintain the high standard of the regions wines. Indeed, the laws are so precise, that educated consumers can predict how a bottle labelled Brunello di Montalcino DOCG will taste before they open it.
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What does Bruenllo di Montalcino, made with 100% Sangiovese grapes, taste like?
pale ruby colour, cherries and clay
Generally speaking, wine made from 100% Sangiovese grapes can only achieve a pale ruby colour. They taste of cherry fruit and earthen clay pot.
the bio-type Sangiovese Grosso
But the Montalcino region of Tuscany, has a specific bio-type of Sangiovese called Sangiovese Grosso. These grapes are smaller.
As a result, they have a higher skin to pulp ratio. And as the grape skins are where red wines gain most of their flavour, Sangiovese Grosso from Montalcino are capable of making more concentrated and complex wines.
the full tasting note of Brunello di Montalcino wines
These wines are just over medium in body weight and finish long with sour-cherry tartness balanced by plush candied black cherry and strawberry fruit. These wines have a solid dose of tannin, whose dryness will grip at the front of your gums and pull. Since they are aged for a minimum of 5 years before release, Brunello di Montalcino shows beautiful, aged characteristics such as figs, wet leaves, and licorice along with pretty violet flowers.
Usually, you would have to cellar your wine for years before gaining that complexity. Brunello di Montalcino producers do that for you.
So undiputedly, the grape Sangiovese is king in Italy! It makes the famous wines of both Chianti Classico and Brunello di Montalcino in Tuscany.
Yet unfortunately, Sangiovese’s image suffers a bit for consumer palates overseas. It cannot make the dark, opaque wines many internationals want. Moreover, Sangiovese-based wines are not as opulently rich and concentrated as say Napa Cabernets.
Instead, Brunello di Montalcino’s complexity is in its elegant subtlety.
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[Wine Tasting Notes from Roussanne, Marsanne and Viognier from Church & State, British Columbia]
Why it's wrong to add other grape varieties to Brunello di Montalcino DOCG...
What happened in Brunellogate?
Overall, authorities investigated 17 people and 42 companies of top producers. Out of the 17 who were indicted, 11 took plea bargains. The authorities allowed the eleven to re-label their wines and sell them. These same eleven have also had their names virtually spared from publicity.
How was Brunellogate uncovered
Originally, professional wine critics questioned the integrity of some Brunello di Montalcino wines. How could they make wines so dark-coloured with Sangiovese?
But it was the finance department of the government, the Guardia di Finanzia in Sienna who took the bold step. They recognized the inconsistencies in the production numbers and seized the bottles and barrels of wine.
Clearly, being able to blind taste and recognize wine and wine quality is useful for detecting wine fraud.
Yet it is the wine laws, that make these offenses punishable by fines and confiscation.
The Fallout of Brunellogate
Châteauneuf-du-Pape Wine Scandal
It is France who is the undisputed historical motherland of premium wine and the birthplace of wine law. Here fraudsters face serious jail time and very public disgrace when mucking about with French wine.
As was the case recently when bulk wine merchant Raphaël Michel fell from grace. Raphaël Michel buys wine from 100’s of producers to blend and bottle wine all over the world. In 2017, the Rhône Valley arm of the company was at the center of a massive wine scandal.
Authorities found that 48 million litres of simple, inexpensive Côtes du Rhône wine was mislabelled and sold as the more prestigious Châteauneuf-du-Pape wine over a 4-year period.
Originally, the organizations chairman, Guillaume Ryckwaert, “was charged with fraud, deception and violations of the consumer and tax codes.” He faced a possible 2 years in jail, a US $370 000 fine and a $600 000 bail.
How are wines from Côtes du Rhône different from wines from Châteauneuf-du-Pape?
Both Côtes du Rhône and Châteauneuf-du-Pape are generally made as blends from the same grape varieties. Moreover, they are roughly from the same wine region; the grapes grown for both these wines are from the Southern Rhône Valley of France.
However, grapevine yields for Côtes du Rhône wines are much higher than the allowable yields for Châteauneuf-du-Pape. Higher yields mean more grapes for making wine and more wine to sell.
Since by law, wines that say Châteauneuf-du-Pape must contain grapes from low-yielding grapevines. These wines are indeed concentrated in flavour.
The terroir of Châteauneuf-du-Pape
Therefore, Châteauneuf-du-Pape wines are well sought after! At the same time, the lower yields mean these vineyards produce less wine to sell, increasing the rarity… and the price.
But there’s more…
galets roulés | pudding stones...
Only the Châteauneuf-du-Pape subregion boasts the famous galets roulés pudding stones that cover their vineyards (pictured below). These rocks heat right up during the hot, Mediterranean summer days. At night, they continue to blanket the grapevines in warmth. Thus by the end of the season, Châteauneuf-du-Pape grapes have more ripeness and higher sugar levels than their Côtes du Rhône counterparts.
by law, grapes must be hand-harvested
Just look at the gnarly, bushy grapevines in the photo below! See how far apart each grapevine is? There are no rows, no trellises, no means to mechanize harvesting on these plots.
In fact, these vines can only be harvested by hand and it’s illegal to even water them.
many very old traditional bush vines in the area
Yup, one final piece of the puzzle that makes Châteauneuf-du-Pape so special is the high number of old, traditional bush vines in the region. Older vines produce less grapes, smaller berries and more concentrated fruit. And since you can’t water them, the vines must be spaced far apart so that they get just enough water throughout the season to produce grapes.
As a result, wines that say Châteauneuf-du-Pape can command much higher prices than wines labelled Côtes du Rhône.
Mistakes in the legal process means that this lawsuit is still ongoing
In 2020, a slight error by the proscecution representing the Rhône Valley wine region meant that the company, Raphaël Michel could no longer be charged.
When charges came to light, Raphaël Michel immediately banned Ryckwaert from managing and representing the company.
By French Law, to charge a corporation, the prosecution must charge its legal representative. The prosecution had indicted Ryckwaert, when it should have named the company’s new CEO, Alexandre Desroches.
Who assumes the legal costs to defend the laws?
Holding producers and winemakers accountable in a court of law is only possible due to wine laws and the proper funding of the authority boards meant to manage and uphold them.
In this wine scandal, it was the the Côtes du Rhône producers’ organisation, the Rhône wine trading firms’ association and the Rhône wine marketing board who took the corporation to court. These organizations are funded by the wineries of the Rhône Valley. They have the most to lose from wine fraud of this type.
This kind of wine fraud increases the supply of prestigious brands as it floods the market with inferior wine. Thus, it can cause the market to drop lowering the price that can be fetched for Châteauneuf-du-Pape wines. Furthermore, consumers that payed premium pricing for a product of inferior standards may decide never again to buy another bottle from the region.
This exposé of 3 recent wine scandals highlights just how much money there is to be made while defrauding luxury products such as wine.
Fraudulent wine and counterfeit wine falsely increases the supply of wines. Simultaneously, it changes the standards and quality of wine confusing consumers. It can also cause a drop in the market price of grapes and wines from a region.
To prevent this, wine laws work to maintain the integrity and quality of the wine, and the prices of grapes from controlled delineated regions.
Therefore, wine laws and the means to enforce them, are extremely important to protect farmers, producers, and consumers from wine scandals. It also helps to have wine professional tasters around who can identify false wines.