Wine destined to be added to gasoline has been sold as regular wine in the Caribbean, according to EU fraud investigators.

The European Union’s anti-fraud office is investigating claims against certain EU officials and the US alcohol trader Archer-Daniels-Midland, the Wall Street Journal reports.

Investigators are looking into allegations that EU officials and ADM were involved in doctoring undrinkable EU surplus wine and selling it as regular wine in the Caribbean, where some wine destined for the US is processed.

The EU distils its wine surplus to 95% pure alcohol and sells it at a loss at auction several times a year, in order to stabilise wine prices in Europe.

ADM is also accused of colluding with other bidders at the wine auctions.

ADM senior vice president of corporate affairs Larry Cunningham said the company is ‘looking into’ the allegations, but hasn’t found relevant company documents. The company buys EU wine to make ethanol, which is blended into petrol to reduce pollution.

A spokesman for the European Commission said an auction scheduled for last October was suspended after the commission’s agriculture service became suspicious.

Written by Josie McLaughlin, and agencies26 April 2002