This week’s wine news: Italian police bust up a fake wine ring, plus bad news for high-end winery profits and Hardys money-back wine guarantee
• Phony Sassicaia: Italian police seized almost 350 cases of fakes of one of Italy’s most famous wines, which can cost as much as $400 a bottle. Operation Bad Tuscan, reports Manchester’s Guardian newspaper, uncovered a ring that used cheap wine from Sicily to counterfeit Bolgheri Sassicaia, what the story called a “prestigious Super Tuscan wine.” The wine included fakes from the highly-praised 2010 and 2015 vintages. The wines, sold for two-thirds less than their usual price, were destined for Russia, Korea, and China. So far, 11 people have been arrested. Italy’s wine cops have been busy this year: They raided Sicily’s Feudo Arancio winery as part of a Mafia investigation into money laundering.
• No profit here: The Seeking Alpha financial website details just how difficult it is to make money in the wine business, even – and especially – if the company makes high end wine. Analyst Ian Bezek is frank about Crimson Wine Group, whose brands include $100-plus producers Pine Ridge and Archery Summit: “Simply put, if a company like Crimson can only earn 26 cents a share in the best of times, and outright loses money during industry downturns, the stock isn’t worth a whole lot on a P/E basis.” That an analyst outside the wine business has noticed what’s going on with wine speaks volumes about the problems the industry faces, and that hopefully the industry will address.
• Money-back guarantee: The Australians know how to sell wine: Hardys is offering its Aussie, British, and Irish customers a 100-percent refund if they don’t like the Hardys wine they bought. This is a brilliant idea, which is why (assuming it’s legal in the U.S.) we won’t see it in this country. The guarantee includes all the brand’s wines, from the US$80 Eileen Hardy Shiraz to the US$10 Nottage Hill label. Why brilliant? Because the biggest obstacle most consumers face with trying something new is that they don’t want to waste money on something they aren’t sure about. This promotion eliminates that uncertainty.