A South Australian wine maker has been convicted of 34 counts of falsifying records in a bid to sell grape juice as chardonnay when in fact the juice was produced from lesser grapes, including sultanas.
The South Australian Magistrates Court found that the former managing director of Rivers Wines, Andrew Hashim, attempted to pass off the grape juice as chardonnay and instructed his staff to falsify records to support the deception.
Hashim, who is yet to be sentenced, faces fines of up to $3,000 for each offense, or a total of $102,000.
River Wines, which had previously pleaded guilty on 97 similar counts, faces fines up $15,000 for each offence, or up to $1.45 million in total.
Auditors from the government agency which looks after the wine industry, the Australian Wine and Brandy Corporation, launched an investigation into the great grape fraud after complaints from several companies that had purchased bulk grape juice from Rivers back in 2003.
Chief executive of the AWBC, Andrew Cheesman, says the rarity of false grape cases indicate the integrity of Australia’s industry.
“Since the AWBC commenced its investigation shortly after the breaches occurred it was able to prevent falsely labelled product entering either the domestic or international marketplace,” Cheesman said in a statement.
“The vigilance of some wine companies that had purchased the grape juice, and the cooperation of a number of grape growers who had supplied grapes to Rivers Wines were critical in ensuring a successful prosecution.”
The issue of wine fraud has long caused problems in the global grape sector.
As well as cases of grape growers passing off cheap grapes as high-end varieties, there is also the problem of wine markers misrepresenting vintages (that is, the year the wine was produced).
Other fraud problems can include label fraud and passing off “blended” grape juice as a having come from a single grape variety.
The most recent high-profiled case of wine fraud involved a group of French wine makers, who were prosecuted in February for passing off cheaper merlot and shiraz grapes as pinot noir.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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