Burgundy’s reputation threatened by fraud

PARIS — Accusations of wine fraud, which have been swirling around the international trade in rare vintages, have now struck home at the source of some of the world’s most prized bottles, the cellars of Burgundy.

The Burgundy wine industry has been in an uproar since news emerged last week that four executives of one of the largest wine producers in the region, Laboure-Roi, had been detained on suspicion of falsely labeling hundreds of thousands of bottles of wine.

The accusations follow closely on a separate case in which a grand jury in New York last month charged an Indonesian wine collector, Rudy Kurniawan, with multiple counts of fraud in what prosecutors described as a multimillion-dollar scheme to sell wines falsely labeled under prestigious names like Chateau Petrus and Domainede la Romanee-Conti.

While the case against Kurniawan centers on what appear to be old, trophy bottles that sometimes change hands for tens of thousands of dollars, the suspected fraud at Laboure-Roi involves more recent, more modest wines.

Burgundy is the spiritual home of the French concept of “terroir”: the idea that wine should be a transparent expression of its place of origin.Strict regulations govern the geographical provenance of French wine, and Burgundy has gone a step further, seeking UNESCO World Heritage status for the system under which its pinot noir-based reds and chardonnay-based whites are labeled.

“The image of Burgundy is badly damaged by this case,” said Laurent Ponsot, a prominent producer in the Burgundy village of Morey-Saint-Denis who worked with the FBI to investigate the supposed fraud by Kurniawan.

While noting that no one has been formally charged in the Laboure-Roi case, Ponsot added: “To see that people are taking these rules for nothing makes everyone very sad, even if, from inside, it’s not really news that these kinds of things are happening.”

Before the introduction of the French geographical labeling system in the 1930s, the practices of which Laboure-Roi is accused were considered widespread in Burgundy and other wine regions. Burgundy wines, which can sometimes be thinly endowed, were often blended with the more robust produce of the sunny South of France or Algeria, then a French colony.

While not generally considered one of the best producers in Burgundy, Laboure-Roi, based in the winemaking town of Nuits-Saint-Georges,is one of the largest in the region, selling about 10 million bottles a year. About threequarters of this is exported.

Laboure-Roi is a so-called negotiant, which buys grapes from independent growers and turns the produce into wine. The reported fraud was uncovered when the police compared the firm’s incomings and outgoings.

Eric Lallement, a prosecutor in the Burgundy capital of Dijon, said the firm was suspected of having topped up 500,000 bottles of supposedly fine Burgundy, worth about $3.4 million in sales, with ordinary table wine. In a related scheme, the firm is accused of switching vintage labels to fill customer orders. If, for example, there was no more 2006 Meursault, Laboure-Roi simply put a 2006 label on the 2008 wine from that prestigious village, Lallement said.

Receptionists at Laboure-Roi and at the firm’s lawyer, Emmanuel Touraille in Dijon, said no one was available to comment.

Touraille told a local newspaper, Le Bien Public, that Laboure-Roi, owned by a company called Cottin Freres, whose top executives are the octogenarian brothers Louis and Armand Cottin, was cooperating with the investigation. The incidents in question occurred more than three years ago, he added.

“There were some thingsthat were not correct at the time, but we have rectified them all,” Touraille said.

That explanation has not satisfied the Burgundy Wine Board, which represents about 4,000 producers in the region. Concerned about the possible damage to the image of Burgundy, the board has moved to join the case against Laboure-Roi as a civil party, which would give it access to the prosecutors’ files.