Dr Vino's wine blog

Wine investment fraud may run £30 million a year according to a source in a BBC investigative segment that aired last night. It’s interesting, though hardly surprising, to note the fraud story moving beyond simply counterfeit bottles.

The segment on wine fraud highlighted an investor group that lost 50,000 when the wines it purchased were never delivered. While it is tragic, it’s even more tragic that one of the bilked investors admitted that he couldn’t afford to lose the money. Perhaps he should have bought wines to drink, rather than ones for speculating on.

Simon Staples of BBR in London cites 400 percent returns on wine in 18 months. Jim Budd notes that he keeps a list of 60 merchants that he wouldn’t deal with and cited the £30 million a year figure. What do you think of that estimate–low or high?

Caveat emptor!

SPIT: repurposed content
Snooth.com, a site that ranks high in search results yet often offers frustratingly little hard information, has been scraping Cellartracker content, the Vintank blog suggests. The Snooth co-founder admits the content has “slipped through” their Ph.D. programmers since 2007 and apologizes. The Cellartracker founder comments on the post to say he has emails from 2008 contradicting several points in the apology post. As they say in the Twitterverse: oh, snap!

SPIT: sex
According to a new study, wine grapes lack genetic variation because of asexual reproduction, making them susceptible to pests and/or disease. This may raise use of pesticides or fungicides to unacceptable limits, which leaves growers three options: developing genetically resistant grape varieties, going organic, or cross-breeding grapes to have naturally sturdier varieties. [NYT]

SIPPED: cool wine
FedEx announces temperature controlled trucks to certain hubs, but the last stage of delivery will be in regular trucks. Is half a trip better than none? [winebusiness.com]

SPIT: frozen grapes
The head of the Canadian Vintners Association points the finger at China in recent icewine fraud. [Reuters]

SIPPED: bidding
The auction of Andrew Lloyd Webber’s wine in Hong Kong grossed $5.6 million, surpassing estimates. Sotheby’s cited the consignor’s “proven reputation.” [AFP]

SPIT: suds
Australians are drinking less beer than any time in the past 61 years, according to government statistics. Don’t worry, they’re not on the wagon: wine is growing in popularity. Will “wine” ever be Australian for “drink”? [smh.com.au]

SIPPED: Desperation!
The Swiss water purification company, Katadyn, has a wine-like product for non-discriminating, thirsty trekkers. They market a red wine powder that hikers can take on the trail, add some of their purified water, and voila, wine! Only they won’t call the 8% alcohol drink “wine,” mostly because the association of Chianti producers has complained. Katadyn’s defense: “We are well aware that we’re not even permitted to call the product wine. No grapes were used in its production, it’s simply a product that is flavored to taste like wine.” Coming next year: powdered beer. [Der Spiegel]

SPIT: family relations
Gary Heck of Korbel has sued his daughter, Richie Ann Samii, for defamation in postings on Craigslist. She denies the allegations in the Sonoma Press Democrat. The two are also involved in legal maneuverings over a multimillion dollar stake in the company.

SIPPED: fraud
Why do the empty wine bottles that fetch the highest prices on eBay correlate with those that are the most expensive and presumably authentic when full? An academic study (in progress) suggests counterfeiting. [Freakonomics]

SPIT: fraud
Researchers at the University of Bourgogne in Dijon have developed a way to track the barrels used for aging a wine: using a mass spectrometer. Each forest has an identifiable fingerprint for its lumber and that can be traced for 10 years after leaving the barrel. The researchers suggest that it could prevent fraud in wine, passing off a less expensive wine as a pricey one. But perhaps its best use might be to track whether the barrels came from the same pricey forest they claim to be from–or a low cost competitor. [New Scientist]

SIPPED: Wine paraphernalia on display
The Art Institute of Chicago has a two-month exhibit called “A Case for Wine: From King Tut to Today.” They describe the exhibit as the first of its kind at “tracing this beloved libation’s surprisingly significant role as a stimulus and source of artistic endeavor.”

SIPPED: red wine in the Tour
And if you were third overall in the Tour de France, what would you imbibe the evening before the rest day? Check out Lance Armstrong’s tweet for his answer: “Made it to Limoges…Gonna have dinner, drink a glass of red wine, talk to my kids, and crash out!!” Hopefully it was the real deal and not the powdered “wine.”

SPIT: corks in Champagne!
Champagne house Duval-Leroy has announced that they will be replacing the cork with a “revolutionary” metal cap. Full details will be announced next month. The BBC reports that it will “still produce the familiar “pop” and spray beloved of generations of racing drivers on the winner’s podium.” But how will this affect the Japanese corkslinger?

SIPPED: wine as a tax revenue source
New York State will raise the excise tax on wine sold or made in New York from $0.18 a gallon to $0.30 a gallon, effective May 1. This rate increase of roughly two cents a bottle may be too little to pass on to consumers thus may fall to producers or wholesalers. In order to avoid channel stuffing, there will be a “floor tax” levy imposed on warehouse inventory as of May 1. So will there be mega sales in NY wine stores between now and then to draw down said inventory? [NYT]

SIPPED: fraud
Fraudsters posing as buyers for British wine retailers have bilked French producers out of an apparently large amount of wine. Sad. [Decanter]

SIPPED, surprisingly: Bordeaux 2008
If in 2008 grapes were, in the words of Jancis Robinson, “swollen with summer rain,” vineyards are “ravaged by mildew and threatened by rot,” would that make for a good vintage in Bordeaux? Despite all odds, Robinson in the FT and Elin McCoy on Bloomberg attest to finding some surprisingly good wines. McCoy asks the money question: “But dropping prices dramatically in a good vintage? It’s not in the Bordelais DNA.” But some have gotten the message as she quotes Chateau Ducru-Beaucaillou, owner Bruno Borie: “We have to go back to basics, go back to the consumer, instead of the speculators.” Subsequently, Decanter reports several releases down 20 – 40% from last year’s prices. What will happen ultimately to the weak and expensive 2007 vintage? A caution against buying wine as futures…

Last summer, some Italian police were trained as sommeliers. They have been kept busy.

First, 600,000 bottles of Brunello di Montalcino from Castello Banfi have been impounded because the wine, which should be 100% sangiovese, may have had other grape varieties blended in. Not a big deal, really, but it is in contravention of the Brunello di Montalcino standards.

Now, thanks to a tip from Gabrio, I’ve learned that there is another, more serious adulteration scandal affecting 70 million liters of Italian wine. According to this poorly translated page from L’espresso, fertilizers, hydrochloric acid, sulphuric acid and maybe more have been found in some low-end wines in Italy. The perpetrators cooked up the “hellish cocktail,” apparently, in an attempt to stretch wine by adding water and sugar. Then they used the industrial acids to break the sucrose (sugar) down into glucose and fructose, which are allowable and prevented detection. Yikes. L’espresso calls it “the largest food adulteration ever discovered in Italy.”

Gabrio writes “This is a serious problem that can damage the Italian wines image like the ethanol scandal that happened 22 years ago…That is the reason why I stay away from the mass produced wines.”

Do you think Italy has more fraud than other countries? Or are the authorities just better at sniffing it out?

The pace of events in the best wine story of the year has just quickened. Earlier in the year, the Wall Street Journal had a page one story revealing the billionaire Bill Koch had assembled evidence of fraud in the auction market and was preparing to turn it over to the FBI. The New Yorker followed with a fascinating story of “The Jefferson Bottles,” which laid out even more details about the story, which included such characters as Koch, described as a billionaire sheriff trying to right wrongs, an elder statesman in the world of auctions who was either culpable or gullible, and a fraudster named Hardy Rodenstock who was known fro throwing elaborate parties and perhaps being a superb blender of old wines into fraudulent bottles.

Now, the WSJ goes back to the well and reported on p. A16 on yesterday that Bill Koch has sued Zachys and collector Eric Greenberg in federal court in New York. Koch bought $3.7 million from a Zachys auction on October 28, 2005 that was sourced to Greenberg’s cellar and now alleges that 11 of those bottles were fakes. Zachys declined to comment and Greenberg’s attorney called the allegations “absolutely false.”

But now Howard “wine under $20” Goldberg rides in with the revelation on Decanter.com that it was Eric Greenberg’s cellar that was auctioned this past weekend by Acker, Merrall. Acker had previously not named the collector who was selling, instead referring to it as “the man with the golden cellar.” It fetched $15.6 million including commissions.

Related: “Has the wine auction market peaked?” [Dr. V]
See the official court papers via scribd.com

SPIT: fake wine
Italian police (these cops?) have made arrests in a case where about $1 million in cheap wine passed off as expensive. The scariest part is one official who says that the lack of border controls in the EU means that ‘It is illegal to transport unlabeled wine across European borders, but… it’s very difficult to enforce the law.” [Decanter]

SIPPED: beer writing
Michael Jackson is dead at 65–no, not THAT Michael Jackson. Instead, the British beer writer. Is he remembered for his tasting notes? Not so much. I liked this praise from a colleague in his NYT obit: “He was simply the best beer writer we’ve ever known. He told wonderful stories about beer, breweries and far away places. He told the story of beer through people, and he was humorous and erudite at the same time.” [NYT]

SPIT: 2007 vintage, Bordeaux version
Bordeaux may allow chaptalisation, or the addition of sugar to the wine to raise the alcohol level. Remember that rain I reported on in June? Seems like there wasn’t enough ripeness in the end. Funny, and we were all just thinking it was warming up–the Bordelais had been adding water in recent vintages to cut high alcohol levels. [Decanter]

SPIT: glass bottles
Fully 95 percent of wine bottles in the EU come from three manufacturers: Saint-Gobain, Owens-Illinois INC and Ireland’s Ardagh Glass. There’s already a shortage and importers and distributors are complaining to the EU, hoping to break the glass oligopoly. Why? Probably because price increases eat into their margins and can’t be passed on to the consumer. Think about the box, people! [AFX News]

SPIT: bulk wine
The EU puts the distillation of bulk wine up for a tender offer. [Reuters]

SIPPED: Indiana reform
Thanks to a federal court decision, things might just get better for Indiana wine consumers. [Indy Star]

(image)

Check out these wines–could almost be a photo from an auction catalogue, right? Well, except for the “COUNTERFEIT” stamp on each bottle. oh, and the minor detail that they are arranged in a landfill.

The hammer fell on these bottles as you can see in the series of photos after the jump. If by hammer you mean garbage compactor. Yes, the US Marshals destroyed over 500 bottles yesterday from convicted wine counterfeiter Rudy Kurniawan. Previously, they had put over 4,700 bottles they deemed not fake on the auction block–along with Kurniawan’s Lamborghini and other seized assets. Read more…