Gallo and Constellation to pay out in fake Pinot case

  • Friday 20 January 2012

E&J Gallo and Constellation have agreed to pay up to US$2m in an out of court settlement to consumers duped in the notorious fake Pinot Noir scandal.

Red Bicyclette Pinot Noir: 'large amounts of Merlot and Syrah'

Under the terms of the proposed settlement, set to be finalised in court in California in April, Gallo will pay US$1.15m and Constellation US$850,000 into a fund set up to reimburse consumer claims related to the affair.

Between January 2006 and March 2008, the companies bought 18.5m bottles of fake Pinot Noir from several French wine producers, selling it under a number of brand names, including Red Bicyclette, Redwood Creek, Turning Leaf, Farallon, Rex Goliath, Talus and Woodbridge by Robert Mondavi.

The French producers, including Ducasse, Vignobles Alain Maurel, Sieur d’Arques, Montblanc and Caves Pierre Fabre, received an assortment of fines and suspended jail sentences for their role in the affair, which made them a reported profit of €7m.

Meanwhile, three Californian wine consumers, Mark Zeller, Elayna Garcia Freiberg and Joan Warren, launched a class action against Gallo and Constellation, accusing them of ‘unfair competition and unlawful advertising involving alleged mislabelled beverages’.

The trio of plaintiffs could receive a maximum of US$58,000 from the settlement fund. Other consumers who bought one of the fake bottles will get their money back – but if they have no proof of purchase, they will only receive US$3.50.

Both Gallo and Constellation denied the class action allegations that they mislabelled the wines, claiming that they in turn were victims of their French suppliers and that there was ‘no way to determine scientifically if the wine did or did not contain the required amount of Pinot Noir’.

They have always maintained that French documentation confirmed the wine was Pinot Noir – when in fact the shipments contained large amounts of Merlot and Syrah.

The proposed settlement makes no finding in favour of either side in the class action, but acknowledges that Gallo and Constellation ‘have agreed to make certain reimbursements to consumers who purchased the wines in question, in order to assure customer satisfaction and resolve the claims made in this lawsuit without expending more time and money’.

Details of the settlement are now being publicised across the US so that affected consumers can make claims for compensation.

Speaking after the scandal came to light, E&J Gallo winemaker Gina Gallo admitted that it had been ‘something of a disaster’ for the company.

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