A WAY TO GET PAID FOR DRINKING OR MAYBE NOT DRINKING FAKE PINOT NOIR AND WHAT TO DO ABOUT IT

Need a few bucks? Well, if you drank some Pinot Noir that a California court has determined to be fake, you are entitled to get cash back. If you did and don’t have proof or a receipt of purchase you can also get cash back. You probably did not know the Pinot Noir was fake if you drank it. However, this is another story. And, there’s even a possibility that if you think you might have purchased some fake Pinot Noir that you could get a few bucks. To me the latter is not an alternative, but it seems likely that some will take advantage. Here’s the story and how the deal works as well as The Underground view.

 

The Story

In a lawsuit alleging fraud, misrepresentation, and other violations of state laws, a California court has given tentative approval to a $2.1 million settlement of a class action against E&J Gallo Winery, Robert Mondavi owner Constellation Brands, Inc. and a subsidiary, Constellation Wines U.S. Inc.

Last year a group of wine exporters consisting of a dozen people were convicted in French court of exporting a Merlot Syrah blend to the U.S. and passing it off as more expensive Pinot Noir. Over several years it was reported that bulk wine consisting of some 20 million bottles were sold to Gallo and Constellation reaping a $10 million profit for the culprits who exported the wine.

Gallo responded as follows: “There is no way to determine scientifically if the wine did or did not contain the required amount of pinot noir,” Gallo spokeswoman Susan Hensley said. “Regardless, the wine companies involved are working together to reimburse customers who purchased the wines in question.”

In the  Burgundy area of France (Bourgogne) French laws require that to be labeled as Burgundy (Bourgogne), 85% of the wine must be Pinot Noir grown in the designated area (AOC) and that the other 15% can be Chardonnay. No other grapes are allowed. In other areas in France, French laws stipulate that 85% of the wine must be made up of the primary grape. In California, the law states that the wine must be 75% of the grape variety appearing on the label.

 

How The Deal Works

The final court approval is expected April 23, 2012. Under terms of the tentative agreement, customers could get up to $21 without proof of purchase. For those who bought more of the fake wines, a receipt is needed to make a claim for money to be refunded. One of the lawyers for the plaintiffs, Eric B. Kingsley of Encino, said “People are on the honor system” in filing claims without receipts.

The three plaintiffs who brought the suit would share up to $58,000, their lawyers would get $480,000, and $400,000 goes to the company handling the refunds. That would leave $1.1 million for people who bought the fraudulent wines. Those wines include the following wines (which were sold in a price range of $5 to $8 per bottle):

•                   Gallo
  

                                Red Bicyclette Pinot Noir 2005                      

                                Redwood Creek Pinot Noir 2005-2007

•                   Constellation
  

                               Farallon Pinot Noir 2006

                               Rex Goliath Pinot Noir 2005-2008

                               Talus Pinot Noir 2005-2007

•                   Robert Mondavi – Woodbridge

                               Woodbridge by Robert Mondavi Pinot Noir 2005-2008 

Any money left over would go to charity. (To read more on the settlement and how to claim a refund click here).

The Underground View: Sour Grapes?

I’d say. But who are the victims? The U.S. companies that bought the wine? They say there was no way of knowing what was in the wine. That’s interesting. Then who does know?  And, how is the consumer supposed to know? Did the consumers who purchased and drank the fake wines know that they were drinking something other than what was represented on the label?  I’d say that the answer is probably no. Did they like the wine? I have no idea. But, for those that made repeat purchases, I would have to say yes. However, even to those that liked the wines, they were being overcharged for something that was represented to be more expensive than it actually was. And, it took a lawsuit to possibly get some money back. But, look at where the money goes! Nearly half goes to the lawyers and a company that will handle the refunds. That leaves about half to go to the victims. But, it seems for sure that very few of the people who bought the fake wines will even know they are entitled to some compensation. So maybe some on the money will go to charities (I hope those do not include the lawyer’s relief fund). Match these numbers against the $10 million in profits that the French exporters are said to have made on the fake wines; and, the undisclosed, but probably substantial profits that the U.S. companies made. In total the amount could be over $20 million. This dwarfs the $1 million left for the victims.

This gets to the entire point of the Underground view. (And, if you have not already done so, I encourage you to read my article “What is Wine” by clicking here)  I don’t think for a moment that lawsuits are an answer to what is happening with wine. The answer is for the wine consumer to be able to know exactly what we are buying by reading the label. This starts with the concept of “varietal” wines. A law that says 75% of the grapes must be of the type named on the label is ridiculous. To have one grape variety on the label it should be 100%. And, every grape variety used in the wine and the percentage should be stated on the back label. Going beyond this, every ingredient that is not derived from the grapes indicated on the label should also be listed. That includes flavoring agents, coloring agents, chemicals, other types of juice or liquids, and everything else that is not found in the grapes listed on the label.

Industrialized wines and misrepresented wines are increasing. Over time the problem will grow. Now is the time for consumers to speak out and ask and, indeed demand, to know exactly what is in the wine that we are buying. As I have said many times, I consider wine a food and not a firearm or tobacco. The government agency that has historically regulated wine also regulates firearms and tobacco. How much sense does that make? In my view, it makes no sense. But, in my opinion, what it does mean is that wine producers are allowed far too much leeway in obscuring the ingredients in wine from consumers. So long as there are so many loopholes, we will have recurring problems with incidents of misrepresented wines. That may be good for some, but not for the consumer. No more sour grapes! It’s time for ingredient labeling for wine.

 

In Vino Veritas,

John Tilson