Wine relabelling scam smashed

In Comité Interprofessionnel du Vin de Champagne v Simon (Case 20.25.19998/00; 94 - 61, January 24 2007), the Court of First Instance of Namur (Criminal Division) has hit the defendant with an 18-month suspended prison sentence and a fine for his part in the importation and sale of relabelled wine.

The facts which gave rise to the decision go back to 2000 when Hugues Simon, then a law student, was the manager of a wine trading company. The company was involved with the supply of champagne wine marketed by Colruyt, a major Belgian retail chain, under one of its own brands.

Champagne is an appellation of origin exclusively reserved for the designation of sparkling wines produced in the demarcated viticultural Champagne area in France following methods strictly defined by law. With a view to supplying Colruyt, Simon's company claimed to have developed a business relationship with a wine producer of that area.

However, Simon started to import bottles of lower-quality sparkling wine originating from Spain and relabelled them in such a way as to match the champagne wine bottles destined for Colruyt. In some cases he also changed the corks or carbonated the wine if it lacked natural effervescence. The bottles which had been tampered with were then often conditioned in cases in which they were mixed with bottles of authentic champagne wine before being delivered to the retail chain.

At the same time, Simon also relabelled a large number of bottles of French table wine as wine bearing the appellation of origin Côte du Rhône.

The fraud was detected at the end of 2000. In December 2000 the Belgian law enforcement authorities seized more than 10,000 infringing bottles in the premises of Simon's company. He was immediately taken into custody for several weeks while the authorities secured the necessary evidence and started investigating the case.

Colruyt organized a product recall and the destruction of all the potentially adulterated bottles supplied by Simon's company.

In its decision, the First Instance Court of Namur found Simon guilty of several criminal offences, including deception as to the origin and nature of the wines concerned, as well as ancillary labour law, trade practices law and consumer protection law offences.

The court gave Simon an 18-month suspended prison sentence and ordered him to pay a fine. His two main accomplices also received suspended prison sentences and had to pay fines.

From a civil perspective, the convicted parties have been ordered to pay damages to, among others, Colruyt, the producer of the authentic champagne wine as well as the two French official bodies entrusted with the promotion and protection of the champagne and Côte du Rhône appellations of origin, namely the Comité Interprofessionnel du Vin de Champagne (CIVC) and Inter Rhône. Notably, the damages award for CIVC amounted to €300,000 as compensation for the detriment caused to the reputation and image of the champagne appellation of origin as well as interference with CIVC's investment in promoting and protecting that reputation and image.

Nicolas Clarembeaux, Altius, Brussels