What did Gallo know and when did they know it?

by Brad Asmus

Courts in France just convicted 12 french wine industry figures for selling E&J Gallo millions  of dollars worth of wine labled Pinot Noir that were actually blends of different grapes, including Merlot and Syrah. According to Gallo, the bogus Pinot went into Gallo’s Red Bicyclette brand that were sold in 2006 and possibly before.

I did a Google search on this topic and found little mention of this fraud and Gallo’s place in it until this week. It makes you wonder, when and how did GalloRedBicyclette learn of the fraud and what did they do about it? The ATF has been in discussions with French prosecutors about the matter for over a year. Nobody mentioned it to consumers until now.

Decanter got on to this story first with an article on February 3, 2010 that included this slap-your-forhead tidbit:

Between 2006 and 2008, [supplier] Sieur d’Arques allegedly sold 135,000 hectolitres of vin de Pays d’Oc labelled Pinot Noir to E&J Gallo for $4m (£3.5m).

However the total production from those supplying the French distributors amounted to 15,000 hectolitres a year.

Battut [the French prosecutor] said the case proves the defendants were knowingly involved in cutting the Pinot Noir with much less costly Merlot and Syrah, delivering the equivalent of 16m bottles, or 460 oil tankers  and making a profit.

Even better, from the same article:

According to French newspaper La Dépêche, one of the accused said that had the suppliers ‘been asked to put Yoplait on the label, they would have’ in order to satisfy customer demand.

I wonder what the marketing brain trust in Modesto is cooking up to mitigate the fallout from this little disaster. I’m sure the temptation is to blame it all on the French, and why not? A lawyer for one or more of the French defendants has raised the stupid American , no-harm, no-foul defense.

Jean-Marie Bourland, a lawyer for [defendant] Sieur d’Arques, did not rule out an appeal. “There is no prejudice. Not a single American consumer complained,” he argued.

Well, maybe consumers of inexpensive Pinot don’t know the difference between the real and the fake. But shouldn’t America’s biggest wine company? Don’t they have a particular responsibility when importing wine to make sure it is what it’s supposed to be? And when they get it wrong, do they have a responsibility to make it right with defrauded consumers? (Not that I have any idea how you’d do that). Or do they just get to shrug their shoulders, say “we got taken, what can you do?” and let it slide? Watching how Gallo–and the French wine making industry–deals with this will be an interesting lesson in brand disaster management.

At the moment, notes regarding the 2006 Pinot are still on Gallo’s Red Bicyclette site. The entire growing season is described just as though someone from Gallo had been there keeping an eyes on things.

Leave a Comment