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Grape-Switching Scandal Rocks State Wine Industry

June 10, 1989|DAN BERGER | Times Wine Writer

The California wine industry's worst scandal in two decades has come to light in recent weeks as state authorities have accused a number of grape harvesters of selling inexpensive varieties as premium wine grapes.

The latest round of suits was filed Thursday by the state Department of Food and Agriculture, the result of a wide-ranging investigation during the 1988 grape harvest. Shortages of premium wine grapes drove prices up for some varieties last year, but prices of non-premium grapes remained moderate.

In several of the suits, the growers or harvesters are accused of passing off cheaper French colombard grapes as Chardonnays, which sell for more than eight times as much. In others, inexpensive red grapes were allegedly sold as zinfandels. Both Chardonnay and a blush wine made from zinfandels have become highly popular moderately priced wines in recent years.

"There have been suspicions for some time that there were irregularities (with grapes) from some growers," said Frank Indelicato, co-owner of Delicato Vineyards in Manteca. "But it's gotten real bad in the last two years. Some people are trying to take advantage of the high prices for grapes."

The extent of the problem is not yet known, but both federal and state authorities are continuing their investigations. It also is not entirely clear why some wineries apparently failed to detect the switch, or how much mislabeled wine--if any--made it to the marketplace. Industry sources say wine made from the grapes under suspicion was not of the expensive type, but rather fell among those that typically sell for $5 or less per bottle.

Winery officials are clearly embarrassed by the situation, and some express concern about the effect the scandal could have on the industry's image.

"There are 6,000 honest, hard-working grape growers in California and a couple of cases like this make all of us look bad, and that is causing a lot of bitterness in the grape-growing community," said Jim Ledbetter, owner of Vino Farms and president of the Sonoma County Grape Growers Assn.

Six civil cases have been filed so far by state agriculture officials, all in the San Joaquin Valley where virtually all of the state's cheaper wine grapes are grown. However, some of the allegedly inferior grapes or wine are believed to have wound up at wineries in Napa and Sonoma counties--the state's most prestigious wine-producing areas, and federal investigators are known to be looking into some suspicious cases at a number of premium wineries.

Wineries Victimized

The wineries themselves so far are not under investigation for switching grapes, and are considered to have been the victims. However, sources said the federal Bureau of Alcohol, Tobacco and Firearms, a division of the Treasury Department that regulates the wine industry, is checking to see whether some wineries have mislabeled wine made from the suspect grapes.

It was also learned that federal regulators have demanded that a number of California wineries show exactly what they did with any suspected misidentified grapes or the juice produced from them. Winery officials said they are cooperating.

Authorities want to determine whether wineries that bought misidentified grapes or wine violated the federal "minimum varietal content" regulation. Federal rules require that wine bottled with a varietal designation (Chardonnay, for example, or white zinfandel) be made from at least 75% of that grape variety.

The Bureau of Alcohol, Tobacco and Firearms has the authority to suspend the license of any winery that knowingly bottles wine with a varietal designation made from less than 75% of the named variety.

Private Suits Filed

At least three private lawsuits also have been filed. In one, brewing giant Anheuser-Busch recently won an out-of-court settlement in Northern California after it claimed that an Escalon, Calif., grape harvester had sold it lesser-quality grapes labeled as premium zinfandels. The defendant agreed to pay nearly $1.1 million to settle the case after a government inspection determined that less than 23% of the grapes delivered to Anheuser-Busch were actually zinfandels.

Industry officials insist that the situation occurred in only a few instances in the San Joaquin Valley and could not happen in the premium wine areas (Napa, Sonoma, Mendocino and Lake counties, for example) where wineries and growers are closely linked by long-term contracts. "These are smaller communities where the growers know the wineries, people know each other, they eat together, they're friends," a spokesman for the Sonoma County Wineries Assn. said.

By contrast, the San Joaquin wineries are typically much larger and process huge amounts of grapes from many different growers.

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