Australian wine law permits Schild Estate scandal

Australian wine got egg on its face this week because our wine law permits a dishonourable practice. It’s time this loophole was closed.

Tyson Stelzer

Schild Estate got caught doing a naughty thing this week. Last year, Schild Estate Shiraz 2008, made from estate vineyard fruit, ranked seventh in Wine Spectator’s Top 100 Wines of the year. It sold quickly, so Schild Estate responded by making more – by purchasing and blending wine from other vineyards and bottling it under the same label.

The proverbial hit the fan this week when Wine Spectator published the story (http://www.winespectator.com/webfeature/show/id/44637) and Schild Estate responded with a band-aid solution of offering to affix a “second blend” label to the new batch.

I’ve since received word from Australian winemakers enraged with Schild Estate. One said, “It’s disgusting what they have done, Australia needs NO MORE bad press in the US. I am so angry about it, they have done a heap of damage and I wish we could prosecute them somehow.”

The damage has been done, and it’s too late now to undo it.  The thing that concerns me is that there’s nothing to stop it from happening again.

There is nothing illegal about what Schild Estate has done. There is no breach of the Australian Wine and Brandy Act to bottle two completely different wines under the same label, provided the regions, vintages and varieties are as they are stated on the label.

The ACCC, which enforces the Competition and Consumer Act, may have grounds to respond to a situation on the basis of deceptive advertising if, for instance, one blend had won an award, and a completely different blend then carried the same award. However, there is no precedent for legal action under such a claim in Australia.

Wine Australia General Manager for Compliance and Trade, Steve Guy, explained to me that it would be extremely difficult to mount a legal case because it would be very hard to prove that it was a different wine. Often a sample from the original judging is no longer available, so any form of analytical comparison is impossible. “You would have to be relying on a whistle blower in order to prove it,” he explained, which was the case in the Schild Estate fiasco. This begs the question of how often this occurs undetected – there appears to be little or no incentive for a whistle blower to step forward.

Many Australian wine shows now employ their own audit system, in which show organisers purchase random samples of entries from retail outlets and compare these with the same wines that have been submitted. But even here, if a discrepancy is identified, show organisers have little power to do anything more than disqualify the entry. Only a very small proportion of entries are audited, so the chances of being caught are slim, and the rod is light.

There is a secondary issue here, that it is perfectly legal in Australia to bottle non-estate fruit under an estate label, and this deserves consideration in itself on another occasion. The core of the problem at hand lies in the fact that Australian wine law has nothing to say about the consistency or otherwise of wines bottled under identical labels.

I’m not talking about wineries bottling the same blend in successive batches. Logistics naturally dictate that this is unavoidable in large-scale blends, and if the blend is from the same, original source, I see little problem with this.

Schild is not the first estate to bottle an altogether different wine under the same label. In 2003, Huon Hooke exposed significant batch variation in Jamieson’s Run Cabernet Sauvignon 2001 and Shiraz 2001 (Good Living, The Sydney Morning Herald, Tuesday May 20, 2003), describing the releases of both wines as “significantly lesser wines than those I’d tried some months before, wearing exactly the same labels.” In 2002, McGuigan wines was caught out for entering samples of McGuigan Genus 4 Old Vine Shiraz 2000 into a wine show which differed markedly from the wine later released for public sale.

Australian winemakers and marketers work overtime to build the good reputation of Australian wine on an increasingly challenging global stage. So much good work is undone by incidents like this. The vast majority of winemakers – who continue to do the right and honourable thing – would do well to raise their voices and close the legal loophole that permits this practice.  

Surely this is simply a matter of The Australian Wine and Brandy Act stipulating that different blends under the same brand must be labelled in such a way as to clearly identify successive blends?

Winemakers would do well to campaign for this. Otherwise, what’s to stop it happening again?