French Wine Executive Arrested for Allegedly Turning Cheap Wine Into Chateauneuf-du-Pape.

On June 27, French police in Marseille took Guillaume Ryckwaert, the chairman of the giant bulk-wine merchant Rapha?l Michel, and several company managers into custody in Marseille. They were held for 48 hours, and then Ryckwaert was indicted on criminal charges before a tribunal in Carpentras, accused of fraud and deception and violations of the consumer and tax codes.

It's an investigation that has rocked the Rh?ne Valley. Ryckwaert stands accused of masterminding a massive fraud for more than three years, allegedly sourcing the equivalent of nearly 4 million cases of table wine and reselling it as premium wine from Rh?ne appellations, including C?tes du Rh?ne and Chateauneuf-du-Pape.

Philippe Pellaton, president of the Syndicate of Vignerons of the C?tes du Rh?ne et C?tes du Rh?ne-Villages, told me that they had known the company was under investigation since last fall. "Investigators were asking the vignerons to confirm sales contracts, verifying information, and asking questions about Rapha?l Michel," said Pellaton. "Then in June, Ryckwaert was taken into custody, and we said, 'Oh-laa, this is serious.'"

In response to the allegations, the French supermarket chain Carrefour has suspended all supply contracts with Rapha?l Michel, I have actually bought a few bottles of this wine myself.

Most details of the investigation remain confidential, but what is known is that agents from the Marseille bureau of the powerful National Customs Judicial Service (SNDJ) noticed a great number of violations during routine audits at Rapha?l Michel. It is not known whether the SNDJ investigators received a tip that set the investigation in motion. The fraud reportedly covers a period from October 2013 to March 2017.

Rapha?l Michel was founded in 1899, and acquired by Ryckwaert in 2002. The company expanded rapidly under his leadership, particularly after he raised outside capital. Rapha?l Michel trades in bulk wine, which it sources from more than 4,000 growers in the Rh?ne Valley, Provence, Languedoc-Roussillon, Chile and Argentina. It buys from 15 wine cooperatives in the Rh?ne.

The company then creates blends before selling the finished wine to bottlers. Its facilities in Piolenc have four loading stations that can pump the equivalent of 6,500 cases of wine per hour into tankers. The company reported annual revenues of $94 million and sold the equivalent of 10 million cases of wine last year.

The Syndicate of Vignerons of the C?tes du Rh?ne and C?tes du Rh?ne-Villages, and more recently the Union des Maisons de Vins du Rh?ne (UMVR) and the Federation of Syndicates of Producers of the AOP Chateauneuf-du-Pape, joined the case as plaintiffs, allowing them access to the investigators' dossier.

"It's unthinkable for us to not be party to a lawsuit that directly endangers our vignerons," said Pellaton, who is also president of a local cooperative. "We will not allow our vineyards to be defrauded or our appellation to be usurped."

According to state prosecutors, there is no evidence that local vignerons were involved in any way. "I want to emphasize that the auditing process worked. The agents conducted a deep investigation. The mechanics of the fraud have been stopped. The problem is behind us," said Pellaton.

However, the investigation and court case could drag on for months. Ryckwaert was released on a $1.2 million bail, placed under court supervision, and is prohibited from managing Rapha?l Michel.

The other Rapha?l Michel managers were released without charges, but more indictments could follow. The deputy prosecutor argued that the volume of wine in question could not have been manipulated by only one person.

Rapha?l Michel's attorney Olivier Morice denies any wrongdoing by his client. A spokesperson for the company said that no official statement has been issued.

The Rh?ne syndicate has opened a hotline for vignerons who sold their crops to Rapha?l Michel. "At the moment, we don't have any serious cases," said Pellaton. But "there is a lot of concern about the future of supply contracts with the company."

James Freveletti Anfora Wines 847 453 4864

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