Profiting From the Sideways Effect: The Great Pinot Noir Fraud

In 2004, a small film about a Pinot-obsessed wine snob sent American demand for Pinot Noir soaring. There was just one problem: there was not enough Pinot Noir to go around. And where demand outruns supply, fraud is rarely far behind. The result was one of the biggest wine frauds of the century — roughly eighteen million bottles of “Pinot Noir” that were nothing of the kind¹.

The Sideways effect

It began, improbably, at the movies. In the 2004 hit Sideways, the hero Miles rhapsodised about Pinot Noir and sneered at Merlot — and American drinkers listened. In the years that followed, Pinot Noir sales surged in what economists came to call the “Sideways effect,” and demand for cheap, cheerful Pinot to fill supermarket shelves went through the roof⁶.

Demand like that is a gift to honest growers — and a temptation to dishonest ones. Because there was a catch that few American shoppers ever considered: real Pinot Noir is notoriously hard to grow, and there simply was not enough cheap Pinot in the world to satisfy the new thirst.

Not enough Pinot

Much of the inexpensive “French” Pinot sold in America came from the vast vineyards of the Languedoc, the sun-baked south of France that has long supplied the world with cheap wine by the tanker-load². One of the biggest buyers was the American giant E&J Gallo, whose popular “Red Bicyclette” label was sourced from the region.

But the Languedoc is warm, and Pinot Noir, a cool-climate grape, grows there only in modest quantities. The demand Gallo needed to meet was far larger than the Pinot the region actually produced. That gap — between what the market wanted and what the land could supply — was where the fraud grew.

The great swap

The solution, for a network of French producers, was breathtakingly simple: sell cheaper wine and call it Pinot Noir. Between 2006 and 2008, co-operatives, wineries and a négociant sold some 135,000 hectolitres of ordinary southern red — largely Merlot and Syrah — to Gallo, labelled as Pinot Noir³. It added up to the equivalent of around eighteen million bottles of falsely labelled wine, sold to unsuspecting American drinkers as something it was not.

The economics were irresistible: Pinot commanded a premium that plain Vin de Pays d’Oc did not, and the difference, multiplied by millions of bottles, was a fortune⁴.

Caught and convicted

In the end, the fraud was undone by simple arithmetic. French audit officers, checking the paperwork, noticed something impossible: the volume of “Pinot Noir” being shipped out of the region was greater than the total amount of Pinot Noir the region actually grew⁴.

More Pinot Noir was shipped than the whole region could possibly grow.— how French auditors caught the fraud⁴

In 2010 a French court convicted thirteen defendants — executives, co-operative officials and a négociant, including figures from the big Sieur d’Arques group — handing down fines and suspended prison sentences⁵. Gallo, for its part, was found to have been a victim rather than a knowing participant: it too had been deceived.

A very modern fraud

The Pinot Noir fraud is a perfectly modern tale¹. A Hollywood film created a craze; the craze created demand; the demand outran what the land could honestly supply; and into that gap stepped fraud, on an industrial scale. It is also, fittingly, another chapter in the long story of the Languedoc — the great engine of cheap French wine, whose surpluses once sparked a revolt and fuelled an army, and whose thirst-quenching reds this time slipped, relabelled, into American glasses. The lesson is old but easily forgotten: when a wine seems too plentiful and too cheap to be what it claims, it very often isn’t.

Frequently asked questions

Read more

• The influence of wine on pop culture
• Rudy Kurniawan, the great wine counterfeiter
• The Languedoc wine revolt of 1907

References

1. Decanter — Charges brought in the Pinot Noir–Red Bicyclette scandal. ↑
2. The Drinks Business — Guilty verdict for French Pinot Noir counterfeiters. ↑
3. Wine Spectator — Red Bicyclette Suppliers Convicted. ↑
4. Wine Spectator — French Authorities Investigate Suspected Fake Pinot Noir. ↑
5. Dr Vino — French winemakers found guilty in Pinot Noir fraud. ↑
6. NPR, Planet Money — How Sideways changed the US wine industry. ↑

Recommended reading

Vintage: The Story of Wine

Hugh Johnson

A grand history of wine that reveals how supply, demand and fashion have always driven the trade — and its frauds.

A History of the World in 6 Glasses

Tom Standage

On the economics and appetites behind wine, the forces that make counterfeiting so tempting.

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