The Ministry for Primary Industries (MPI) has prosecuted a leading New Zealand wine company for deliberate, deceptive, and sustained breaches of the Wine Act.
Pleading guilty to a total of 39 charges in the Blenheim District Court today were Yealands Estate Wines Limited, the company's founder and director at the time of the offending Peter Yealands, former general manager winery operations Jeff Fyfe, and former chief winemaker Tamra Kelly.
The company and the 3 individual defendants were immediately sentenced after their guilty pleas were recorded.
Judge Bill Hastings has imposed fines against Yealands Estate Wines Limited of $400,000, Jeff Fyfe of $35,000, Tamra Kelly of $35,000, and Peter Yealands of $30,000.
The charges relate to all parties being complicit in making false statements regarding export eligibility applications, and material omissions in wine records relating to the use of added sugar – a breach of EU market regulation winemaking requirements.
MPI's manager of compliance investigations Gary Orr says the prosecutions demonstrate that the system governing compliance in the wine industry works.
"These are the first convictions for offending under the provisions of the Wine Act in New Zealand," says Mr Orr.
"It is common knowledge in the wine industry that you can't add sugar post-fermentation to wine destined for the EU market, yet the parties convicted were well aware of what they were doing.
"Peter Yealands was made aware of what was happening at the time but failed to do anything to stop it.
"This is a significant case which has been the subject of a thorough investigation by MPI investigators and a case that took almost 2 years to complete.
"Of greater significance is the fact it involves one of New Zealand's leading wine companies that engaged in deliberate deception through the use of falsified records that were designed to deceive routine audit.
"The records relate to more than 6.5 million litres of wine, and around 3.7 million litres of affected wine were exported to Europe between May 2013 and December 2015."
Mr Orr says that industry should have confidence that MPI, as the regulator, will investigate when it has evidence of offending and will take appropriate action where offending under the Wine Act is detected.
"As a general rule, the wine industry is compliant and law abiding. That's why this offending is very disappointing.
"The outcome today demonstrates that the system works and that those who breach regulatory requirements will be held accountable.
"It will act as a strong deterrent to anyone engaging in non-compliant behaviour under the Wine Act and serves as a reminder to the industry of the importance of regulatory compliance.
"The aim of the Wine Act is to give consumers confidence that the products they buy are safe and true to label. These systems are in place to ensure New Zealand's reputation as a world-leading wine producing nation is upheld.”
- The wine was not unfit for consumption – there was no health risk.
- Wine exports account for around 6% of New Zealand's total exports earning just over $1.7 billion.
- The offending is historic and significant changes have been made by the new owners of the company. Since the offending came to light, Yealands Estate Wines Ltd has changed its production processes so that all wines are manufactured to EU requirements, regardless of the market in which they are to be sold.