Wine Talk

Snooth User: Charles Emilio

Gallo victim of wine world's biggest con

Posted by Charles Emilio, Feb 7, 2010.

E&J Gallo's 2007 Red Bicyclette Pinot Noir was said by the company to have "the dark fruit aromas and flavours of black cherry and ripe plum". But when a French court case concludes in 10 days' time, the American winery may experience rather different sensations. The bouquet of a smelly deal, perhaps, or the aftertaste of very sour grapes.

For Gallo - and its customers - may well have been diddled by what is alleged to be one of the biggest cons ever perpetrated in the murky and uncertain world of wine. Thirteen people including executives from two wineries, five co-operatives, négociant Ducasse and conglomerate Sieur d'Arques have been charged with selling Gallo millions of dollars' worth of wine which was labelled pinot noir, but which, if truth be allegedly told, wasn't. The quantity involved is staggering - 3.57 million gallons, enough to fill 16 million bottles, or 460 oil tankers.

The arrests of the French wine trade folk followed an investigation that lasted more than a year, according to online editions of the wine magazine Decanter.

Between 2006 and 2008, Sieur d'Arques allegedly sold 135,000 hectolitres of wine labelled pinot noir, but was, says, actually wine made from much less expensive grapes. Gallo apparently paid about €4m (£3.5m) for the privilege.

Investigators became suspicious after realising that the amount of pinot noir being exported from the Languedoc-Roussillon area far exceeded historic levels. France's public prosecutor has called for prison terms of up to 12 months in jail for those found responsible for the deception as well as hundreds of thousands of euros in fines for the companies involved.

According to court reports in La Dépêche, the Toulouse newspaper, jurors in Carcassonne have heard how local wine dealer Ducasse acted as an intermediary between eight grape suppliers and the major winemaker Sieur d'Arques, which then allegedly sold on in incorrectly labelled bottles to Gallo in 2006 and 2008.

A former Sieur d'Arques employee has testified that she, along with the company's financial director, knew that a lower quality grape was being used. The Sieur d'Arques's director claimed that he "did not remember" after the former employee produced emails to the court apparently implicating him and the group's chief executive in the alleged fraud. The court has been told that using lower quality grapes could have saved "several million euros", reports La Dépêche.

Gallo's winemaking notes says the 2007 Red Bicyclette Pinot Noir was sourced from several areas within the Languedoc-Roussillon region in southern France. Susan Hensley, a spokeswoman for the California-based winery said in an email to Reuters: "Our contractual agreement with our supplier guarantees all wines supplied meet French regulations including the pinot noir in question. At this time it is still a question for the French courts and French and US regulatory authorities to determine whether the wine in question was misrepresented to us. When more information becomes available to us from the authorities we will move quickly to ensure that the trust people place in our company and our wines is not put at risk."

If the defendants are found guilty, then the 2010 Pinot Noir Affair will be laid down in the capacious cellars of vintage cases. Already gathering the patina of dust essential to all fine wine scandals are: a constituent of antifreeze added to Austrian wine (1985); Italian table wines made of water, methanol, plus the magic ingredient of a little real wine for flavour (1986); the great mislabelled Bordeaux Case of 1989; sauvignon blanc fortified with green peppers and synthetic methoxypyrazine (2005); and sugar added to Beaujolais (2007).

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Reply by napagirl68, Feb 7, 2010.

No surprise here. a Nasty, nasty winery... I would never drink gallo, even when they did try the "making quality wines" thing... yuck!

Reply by napagirl68, Feb 7, 2010.

This is what happens when you are a conglomerate.. no control....

Reply by GregT, Feb 8, 2010.

Pretty ironic really. So they're sold something that's called pinot nori and isn't really pinot noir.

Maybe they can sell it as Hearty Burgundy?

Reply by dmcker, Feb 8, 2010.

Good one, Greg. ;-)

Reply by Eric Guido, Feb 8, 2010.

I agree with Napa Girl, any wine I've ever had from Gallo has been horrible. I once tried to put on of their Chianti into a sauce and ended up with an acidic and unbalanced flavor nightmare that was near impossible to fix.

Reply by zufrieden, Feb 8, 2010.

Gallo: Not recommended for drinking OR cooking. While Gallo has not touched my lips in many an eon, I would not have thought quality could fall to such Stygian depths. Interesting post.

Reply by zufrieden, Feb 8, 2010.

A coda to my last remark: how is it even POSSIBLE to hawk a lake of faceless red juice as Pinot Noir? If a Gallo representative actually TASTED a sample from the container itself and didn't blink, we can understand why Gallo wine can't even be recommended for cooking...

(Thanks for the tip, Eric).

Reply by amc2010, Feb 8, 2010.

I feel compelled to interject and educate the wine snobs who claim that Gallo wine disgusts them and that they would never drink it. I hate to tell you but Gallo is not #1 for no reason and have been Winery of the Year for the past few years, not to mention they have the top 10 of the top 25 wines for 2009 (more than any other winery). Open up your eyes and realize Gallo is a leading winery in not only winemaking and technology but remember they essentially pioneered the wine industry... so why not put up some respect, strip down your past stereotype and stop dogging them.... and if you are sophisticated in your taste, then don't buy the Twin Valley and purchase the higher priced wines like Gallo Family Vineyards Sonoma which is incredible wine for the price. Advice: take the GFV Cabernet and put into a blind tasting and see what happens.... then come back and talk crap if you feel so inclined.

Reply by VegasOenophile, Feb 9, 2010.

Well I suppose, like any business, there are people out there looking to swindle and make a ton of money selling something mislabeled as something worth more while it's made cheaply. I read "The Billionaire's Vinegar" this fall and there are so many cases (pardon the pun) of people doing shady things. Anytime you deal with something people love to buy, it opens the door for the schemers to show up and try to screw people over. It happens. I doubt this will severely cripple Gallo, after all, they were buying juice from somewhere and someone else. That could easily happen to any big time producer.

Reply by Mark Angelillo, Feb 9, 2010.

Interesting! Thanks for sharing.

Brings up a question for me... How expensive/possible is it to figure out what grape variety was pressed to produce a given juice? If it's a blend is this even remotely fruitful? (another pun!)

Reply by dmcker, Feb 9, 2010.

Just ask GregDP about whatever bottle on one of your wine Fridays... ;-)

Reply by Gregory Dal Piaz, Feb 9, 2010.

We will discuss!

Just to level the playing field a bit. Gallo Hearty Burgundy used to be a great buy. It was almost all old vine Zin, Petit Sirah, and Alicante. the classic field blend style. I had enjoyed bottles for decades before they began buying in fruit from South America for the bottling. Not sure what it is today but, while drinkable, it is a shadow of its former self. Having said that there have been some Gallo wines over the years that were surprisingly good. Like an huge company they play to the lowest common denominator. That is not us, though they do have their high end line that they especially for us, and that's not too bad. I've tasted some of their wines, they're laying about here somewhere. I'll report back.

Reply by axelle, Feb 9, 2010.

sadly gallo wines sell...some people like the synthetic hurts when someone is specifically looking for a bottle...

Reply by zufrieden, Feb 9, 2010.

You may be onto something when you mention the "synthetic sweetness". I was always a bit suspicious of what I detected as a slightly cloying quality in Gallo.

I'd also like to add that I have have tasted the highest end products of this hallowed jug-wine institution and found them sometimes very good. Unfortunately, the wines wobble badly from vintage to vintage and this should not be the case in the better wines. My points in the earlier posts were more to emphasize the enormity of the company's gaff in their little wine-buying exercise. But I was also hoping our rough treatment of Gallo might tease out a defense or two of the company's products.

And so it did!

Reply by napagirl68, Feb 10, 2010.

I am sorry to offend anyone.. I have tasted the Sonoma valley Gallos... "award winners". Yes they were ok... nothing like the mass produced wines. But.. they were "just ok"! I can find many another wine to drink instead that is phenomenal. I fully stand by my opinion.... Gallo, whether Sonoma or Modesto, is not for this discerning wine drinker..

Reply by zufrieden, Feb 10, 2010.

Well, of course, "good" is such a vague and relative term. I mean that some Gallo attempts at high-end wines were surprisingly successful. By this I mean they were enjoyable and not disappointing for the price point - not that they necessarily make roll-call for cellar favorites or better wine-lists.

What irks me most about these large producers is that they are extremely inconsistent year-over-year. This is also true of other crowd favorites (you all know what these are). I have a pretty good idea why the inconsistency exists (continuity in supply of juice, wine-making) but in a warm, sub-tropical climate like California most vintages should not be so wobbly that one year is quite acceptable - even good - while another is most unsatisfactory. While there are some better vintages, admittedly, in my experience the variation is nothing like that seen in (say) Bordeaux - barring very exceptional years.

Reply by atonalprime, Feb 10, 2010.

It is hard to comprehend why Gallo remains at the top of the business, but I see it all the time in other fields (like music...whether you're talking certain pop bands vs. indie bands, or just the "Pop" world vs. the "Classical" world), so its not hard to believe that its just the way it is. When you have a giant company with marketing budgets larger than a smaller institutions whole operating budget, of course the larger company will reach a broader market (audience.) The chances are the people don't know what they are drinking and have no basis for comparison. They're told to like it and they will. I would call most people lazy consumers and go for the bargain and large display instead of really questioning how valuable that bargain is (Cost-Utility Analayis is one of the few things I retained from microeconomics in college.) I think its important to remember that Gallo is not trying to make its fortune off high-end labels, because it is well-finance by the lesser quality and lower priced products. It seems more appropriate to have a high-quality producer creating lesser labels to meet the demands of consumers, while still maintaining their own integrity. I've also seen plenty of great producers, like Cameron Hughes, take that leftover juice and create fantastic wines, but once again, I feel the CH label carries more integrity than the Gallo label.

After a few years of introducing great wines under $10 to my own mother, I think she has finally realized that the Gallo White Zinfandel is perhaps not the best deal, and certainly is not going to provide the same utility as other bottles. She was always a wine drinker, but I don't think it ever occurred to her there was something beyond the supermarket display (and this was in central Wyoming, so selection was limited to say the least.) She still makes some questionable choices, in my opinion, but I feel like I've done my part (and will continue to gently pull her away from certain choices.)

Your market (audience) needs to have exposure and variety to choose from, enabling them to develop a concept of integrity in what they consume. Marketing is an essential tool, but the consumer is typically lazy. A tipping point is needed to bring the consumer back from the Dark Side. Maybe the other companies need to spend more of their budgets traveling town to town, a la PT Barnum, convincing the consumer that there is a reason to spend that extra dollar or two to get out of the dregs.

Reply by zufrieden, Feb 10, 2010.

I like your reference to the typically European top-down approach whereby the best juice is siphoned off to the best labels and the residual used for some kind of lesser or proprietary wine. This is precisely how a well-established, quality-driven winery operates - regardless of region. This model does not injure reputation if carefully applied. It also allows the more parsimonious to try a "second wine" as an introduction to the flagship label. The better New World producers also follow this model - for obvious and similar reasons.

Gallo is actually a hold-over from an earlier era where the nation was primarily made up of beer and whiskey drinkers. While quality is also a vast subject for beer and spirits, suffice it to say that American style beer was designed to meet the needs of Monday night armchair football coaches. Like jug wine, this style of beer has neutral flavor and is traditionally low in alcohol. Such a design promotes higher consumption. In fact, the industrial sized wineries of post-war California followed a model very similar to that of Henry Ford who (at first) restricted the Model T to basic black.

Dare we hope that this peculiarly North Amercian model of production is on the way out?

Reply by Rodolphe Boulanger, Feb 11, 2010.

@Mark - There are some putative Spanish experiments to create a machine (an electronic tongue!) that can determine the vintage and grape varieties in a must or wine. So far they have something that works ok on 4 varieties (Chardonnay and 3 Spanish ones) and a couple of vintages. Still, this is a promising technology that could be commercialized over the next 10 to 15 years once it is developed and calibrated. It could find many applications including fraud detection in fine wines for auction wines and bulk juice purchasing.

Fans of hardcore bioanalytics and seriously geeky acronyms should click through to:

Of course the next step is to create a wine recipe that can fool the electronic tongue. Then the scientists will have to develop a fraud detection spoofing detector and so on...

As for humans (or Gallo employees) detecting this spoof, have you ever tried really, really cheap Pinot Noir from the Pays d'Oc? I'm talking the sub 2 euro bottles that you can get in France... or, apparently not Gallo's wine at 8 bucks a bottle, but maybe some of their competitors? The wine is pretty varietally nondescript and most likely loaded with flavor additives. Moreover, Pinot Noir is one of the most sensitive grapes to heat, overcropping and insane yields - it loses almost all of its desired character. Maybe someone at Gallo should have checked that they were buying more Pinot Noir than those communes in Languedoc produced annually based on vineyard acres and yield restrictions, but that's a big ask for a giant corporation to snoop around in French bureaucracy.

I'd love to know from the court proceedings what was in the phony Pinot Noir. Was it lots of Grenache, Carignan and Cinsault? Or in the ultimate Sideways irony, were the French pawning off Merlot that they could no longer sell to America?

Finally, here's an old thread that dates back to the original announcement of this scandal:

Reply by zufrieden, Feb 11, 2010.

I certainly agree that varietal markings are obscured to naught by over-cropping, additives and heat. And yes - I have tried some of those 2€ bottles from the south of France and they do seem to be soupy generic Euro-wine rather than Pinot.

The wine-bot might be the ticket - at least to discern the variety (here I'm referring to the electronic tongue). If you are right about how nondescript the juice might have been, perhaps the only recourse for Gallo was to do the arithmetic on overall production at the source. Still, the gaff seems over the top for such a large, successful firm.

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