Well, I guess it is OK if the only customers getting fooled were the Australians - NOT.
BTW, regarding whether or not the Wine Spectator has ever been heard of “down there”, or whether the internet even reaches that far… http://www.schildestate.com.au/home/
I assume that the WS scores are being posted inside the stores where the wine is being sold. If so, that is a false claim and people are being deceived. Transactions based on false claims are fraud, no?
It fine if they want to sell the highly rated wine to the use and sell some other stuff locally. As long as they don’t stick the same label on it and claim that it is the same wine. Just to be clear, they didn’t “make” more wine. They bought it. If I understand correctly.
Thanks Lew for posting that. I find the notion that it isn’t frauld to bottle different juice under this label - for the Aussie market - because the Aussies don’t read or care about WS ratings or top 100 to be an odd assumption.
To take Schild now at their word requires giving them the benefit of the doubt, somehting I’m not sure they deserve. This “local market” backstory could very well be their way of spinning a bad situation, after they got caught.
Even assuming all they say is true, the story implies they seem to think of their product in the local market more like 
than vintage wine, although their website paints a very different story.
I’m surprised so many people seem inclined to give them a pass on this.
Guy with law degree chiming in here, if any other Berserkers here are practicing lawyers they may also want to chime in.
While I personally find Schild Estates actions greedy and reprehensible, to actually call it outright fraud depends solely on the laws in Australia. Fraud is generally a criminally prosecutable action so we need both the action and the mens rea – that is, the intent to willfully defraud. Whether anyone in the Australian judicial system actually cares to prosecute is another matter as well. Also, one would have to check if their actions violated any consumer protection laws as well as criminal laws.
Remember, morally reprehensible and criminally responsible are two different things in law. Though they often intersect, they are essentially mutually exclusive.
The other matter to consider here is what harm was caused by their actions to another party. This one I have trouble seeing proven in court. You bought a wine and you got a wine. Not the one you thought you were getting, perhaps, but you still got a wine. Prove to me your financial, physical or emotional harm. Yeah, it would suck if you were one of the people that ended up buying the wine but did buying and drinking it kill you or cause you serious damage that would motivate a prosecution?
A counterfeiting charge wouldn’t work either. There is a problem in Asia of outright counterfeiting icewine by replacing them with sugar water, boiled down cheap wine, bulk icewine diluted with water. Schild didn’t do that. They bought a wine of the exact same kind, blended it with their expertise to match the original as best as they could, and then released it. There was at least some effort put in. It sucks, but this one would actually prove to be very difficult to go after in a court of law.
If it’s any consolation, I think these idiots did themselves more harm than good with the loss of trust in their product and their winery than any attempt to prosecute for fraud could ever do. And the WS and the competitor winery were right to bring it to light because otherwise nobody would ever have known and that could’ve led to a more serious situation like the Austrian anti-freeze scandal that would’ve affected their whole industry. Better to nip it in the bud now.
Top 10 wine. I invest my life savings in buying up all the Schild I can as I am convinced that it will appreciate in value. After all, it was a top 10 wine, right?
I get all my wine and the scandal appears in the news. Come to find out every single bottle I have in my cellar (professional, off-site, of course) is from the 4th version redo. It’s not the wine that won the award, yet a poorly attempted copy (different grower, different blend)…that is being sold as the wine that won the award.
Isn’t this considered financial harm? They sold me a wine advertised as X but ended up being Y. Since Y is not the award winning X, no one is going to buy my wine and I am out of my life savings.
honestly, the only reason why this isn’t considered selling a counterfeit wine is because the winery approved it.
I think that what Schild did is reprehensible.
As an aside, and not really a part of the reprehensibility, the fact that they “tried” to match the blend is interesting. Are they admitting that their own vineyard management methods are irrelevant to taste? That all there is to a good wine is the ability to blend? That precise terroir is irrelevant. That all the fancy pruning techniques make no difference. Racking, time on lees, nature of barrels, time in barrel, etc. make no material difference?
Let’s consider two interesting examples of similar behavior, one from the art world and one from the business world. First, from the art world, you have Salvadore Dali signing hundreds, probably thousands, of blank sheets of paper which were then overprinted with lithos designed by someone else. I have a Dali in my house that is probably one of those. Is that fraud? Yes. BUT is it as bad as what Schild did? No. Why? Because the image itself is right there in front of you and whether or not you like it is something you can determine by looking at it. It’s a bad investment, but as something to hang on my wall, it looks just as nice regardless of who produced it. On the other hand, the Schild is in a bottle and you buy it before you taste it. You read tasting notes on the wine, read articles on it, you ask friends about it, and then you buy it because you think you are getting the same thing that they got. But lo and behold, it’s something else in the bottle.
And let’s take another example from the auto world. About 30 years ago there was a huge fuss when it was found that GM was putting Chevy engines in Buicks or Oldsmobiles. The NY Attorney General’s consumer fraud unit went after them and GM settled for big bucks. GM had represented that people were getting luxury Buicks but they were actually sold engines from GM’s lowest level line. I can’t find an Internet link to that story for more details, but it was in the late 1970s or early 1980s. Very similar to Schild. You represent that something is the luxury brand, but when you get it home, you find that the auto maker has put Sierra Carche under the hood.
And on the legal issue, I’m not going to get involved in a legal argument because I tired of doing that after all of my bouts with Squirrels. But I can’t leave this alone:
I have no idea what the law is in Australia, but if you are talking about this from a US Legal perspective, you need to go re-read your Torts textbook. I would have no problem establishing fraud here. The idea that you bought a bottle of wine and there was wine in the bottle, so you were not damaged, does not pass the laugh test, and if you raised that argument in a federal case, you would be at risk of Rule 11 sanctions.
I can’t speak to any other jurisdictions, but in Wisconsin fraud is both a criminal and civil action. Further, even speaking criminally alone, Wisconsin, like most states, has general and situation-specific criminal statutes. So it would seem possible or even likely that while Schild did not violate some wine-industry rule, it could still have violated a general fraud statute. The question then becomes whether a prosecutor is limited to the specific statute.
Ironically, my one criminal file ever has some relevance. In Wisconsin there is a Milk Adulterating statute as well as various levels of Theft by Misrepresentation (Fraud). A bunch of farmers charged were with the latter, which carries much stiffer penalties than the former, and argued unsuccessfully that the DA could only charge under the specific milk adulterating statute. There were other issues with charging under the fraud statute that would not matter here, and as I wrote an appeal for one farmer, I don’t think I should comment further.
Australia might well be different, but I think its hard to say with any certainty one way or the other. I would doubt that the fact that there was some form of Shiraz wine in the bottle would be a helpful defense in many jurisdictions. Just so we’re clear, I’m not giving anyone legal advice.
Either way, the better question is whether it’s right/wrong, cool/douchy, etc., not whether it’s legal. I don’t get to worked up about it, for the reasons others have used to explain or excuse Schild (this happens more than we think, and we’re not talking about Penfolds St. Henri or Grange). But insofar as I care, I come down on the wrong and douchy side. I also bought some in January. Based upon timing, it seems unlikely that mine could be from a 2011 bottling run, and they have specifically denied any came into the US. From the numbers on the bottle I can’t currently tell for sure.
In any case, I like the wine as $20 Shiraz goes. Whatever bottling I have, it’s not as extracted and oaked many of its competitors are. It ain’t Hermitage, but I like it. I will still be less likely to buy any in the future. For heaven sakes, few people like this wine as much as Harvey Steinman, and he’ll give the 2009 a great score too.
Lewis, I think you understand my point, which was not “OK so long as someone else was getting screwed not me” but rather that the typical Australian consumer may simply not care about whether there is a second blend. They may be buying the wine because they liked what the winery sold under that label in prior years, and it’s sort of up to the winery to decide whether the new blend lives up to those quality standards. (If it does not, then they need to decide whether they do more harm to their brand by selling an inferior wine than by having no wine available under that label for a couple of months.) To draw a rough analogy, suppose the Martini Sonoma Cabernet – currently the subject of some disdain in another thread – received a great review from some Aussie publication, and Martini decided to ship another 5,000 cases to Oz while running a second blend to sell in the US, where the wine hadn’t yet been reviewed. Would that be fraudulent?
Now it is quite fair to point out that they have the Spectator review up on their website – I had not thought to look there because it did not occur to me that they sold directly. I had looked at a number of Australian retailer websites; not a scientific survey, but in a little poking around I literally did not see a single WS review, so take that for what little it’s worth. Of course I agree that Schild shouldn’t be using the WS review to sell a wine that is not the one reviewed. I would hope they would take the WS review off of their website before they start selling the second blend locally.
That is the assumption I was questioning – namely, do retailers in Australia actually use WS scores to sell wine? I just don’t know. I was hoping someone who knew the Australian market might respond.
They purchased bulk wine, blended it, and bottled it under a label. That is one way of “making” wine, just like buying vegetables, chopping them up and putting them in a bowl is “making” a salad. I don’t have to grow the lettuce!
Larry, it’s not a “notion” or an “assumption”; it’s a question: What exactly makes it fraudulent to sell two different blends under the same label, so long as that label accurately describes both blends? And at what level of the market does it become problematic? If you found out that there were two different blends of Beringer White Zinfandel in a particular year, would that be fraud?
I would be very excited to find the Australian customer who has invested his life savings in Schild 2008 Shiraz at $18/bottle based on a WS review. I have some real estate that he might find attractive. 
– Matt
Sorry, should’ve been a bit more clear on my legal thinking. I was thinking a little more along the lines of criminal and defending the winery just to be a bit of a devil’s advocate. Should also have been clear that my thinking was from CANADIAN legal perspective. Sorry for not being a bit clearer. Now…
Tom – Now there’s a good argument for damages in civil court. I’d say that yes, under those specific circumstances, you could sue their asses off.
Jay – You’re right to chide me to read the US legal textbooks, because I feel you’re somewhat making my point. As the incident occured in Australia, we would have to know the Australian laws to see if and how we could go after the winery for this travesty. Perfect example: up here, we don’t use the laugh test (though I’m sure I’d find something more or less similar if I relooked at my Canuck law books) and I couldn’t tell you personally what a Rule 11 sanction is without researching it (which I just did, its for blatant unethical conduct by a lawyer in court). Makes me wonder what the tests would be in Aussieland and how severely they would be applied.
One other minor point: I would love to see what those labels they were affixing to the US destined shipments actually said. I noticed they mentioned it in the article but didn’t say what the wording was, just that they were US bound. That would be very important to know for a case.
Don’t worry, no arguments here. Believe me, I’m on everyone’s side here and glad these idiots were caught. I’m also happy to get a US legal perspective on it as well. Is there anyone on the boards from Australia itself or at least has knowledge of Australian law that could share with us some further insight?
Sorry, to be more specific, the specific blatant unethical behavior in question that would garner a S. 11 sanction would be submitting a frivolous pleading or argument without evidence to back it up in case anyone was wondering. So Jay is saying that if I tried my argument in a US court, I’d be slapped silly. 
It would be fraud if Beringer made estate grown and bottled white zin, and promoted it and sold it as such, and then blended up more from bulk wine and passed it off as the same.
Why is this hard to grasp?
I get the sense that some people are dismissing this practice because of the price of the wine. To me, it matters not if it is $5/bottle of $500/bottle, it’s still intentional deception of the consumer.
I think the labelling laws here cover things as far as they go. Does it comply? Does it meet the 85% test rules for what it claims to be: shiraz, from the Barossa, from 2008. Yes?
Is it from Schild estate? Yes. no problem.
Can’t see any legal issue.
You might claim all sorts of moral or ethical stances concerning the integrity of the estate, yada, yada, but I doubt thy’ve done anything illegal. Certainly not in Oz, and I doubt anywhere else.
WS carries nearly no weight at all in Oz, except in instances similar to this; ie local availablilty of a wine is reduced because it’s all been shipped to the US to meet the demand there.
But even if WS made some Oz wine No1 of the top 100, there’s be scarcely more than a handful of buyers here who’d take any notice.
The demand would come eventually because local media would pick up on it, and then things would start snowballing. But’s it’s all indirect.
cheers,
GG
Lew,
You sound a bit snarky … not getting any good Volnay lately? ![[flirtysmile.gif]](/uploads/db3686/original/2X/c/ce2642e7caade9035e3a3b13c8b8d2b3ddb2b4c9.gif "[flirtysmile.gif]"){kind=small}
Where do you see the claim that this is claiming to be an estate bottled wine? Schild Estate is the name of the winery ala all the wineries with the word Napa in their name. In fact, to me, regarding the article and the wine it seems clear that the wine is from Barossa and bottled by a third party; much different than “estate bottled.” IMHO, hinkey sure; unethical, again to me, absolutely; but, fraudulent in a legal sense … I highly doubt it but, I am not an Australian lawyer.
My question is, assuming the blenders at Schild Estate are good at their vocation, how much Winespectator #7 Wine of the Year quality juice is laying around the Barossa months after the vintage has been, for the most part, bottled? That question, to me brings in to play many more interesting questions than “who’s zooming who here?” That question, seems easy to answer to me. Schild Estate rolled the dice and made a bad decision. They may have had good intentions but, they might end up seeing the sign for hell while on that road. Why not bottle it, explain it in the media and call the wine, The Number 7 Pretender. Always take the high road. The climb might not be easy but, you always get to look down.
Hi Guys,
I found this article written by a fellow named Tyson Stelzer on the Australian website www.clearaboutwine.com. You can find it at http://www.clearaboutwine.com.au/wp/index.php/australian-wine-law-permits-schild-estate-scandal/
Unfortunately as I suspected, based upon the research this fellow has done, current Australian laws simply don’t allow for the prosecution of Schild Estates (and likely not for the tortious establishment of damages, either). Per their laws, they have done nothing illegal at all.
The author implies that as disgusted as we Berserkers are here, the Australian winemaking community is apparently even more outraged but are just as powerless to do anything about this. I really sympathize with them, they will be the ones who truly bear the brunt of the damage from the scandal. ![[swearing.gif]](/uploads/db3686/original/2X/8/8a0d3f3461d40641d294442fc2be78039bf94d19.gif "[swearing.gif]"){kind=small}
Tran, thanks for that article. Scott, I’ll try to not be snarky, sorry about that.
The article indicates that Australian laws allow “Estate” in the winery name, even if non-estate-grown wines are sold under that label. I thought that was the case in Australia, so no surprise there. I also have the impression (could be wrong) that U.S. law would not allow that, and a U.S. winery using “Estate” in the winery brand must make only estate-grown wines. If I have that wrong, somebody please correct me.
So it appears the “second blend” wine is not illegal from its label under the wine law. I still believe it may be illegal, and certainly is reprehensible, to advertise and promote the wine as the original when it is not the same wine. The marketing materials name Ed and Michael Schild as the vignerons, which means they are responsible for the farming and winemaking. The early harvest by “our vineyard teams” is described. The fermenters are described. So is the barrel selection. And the WS tasting notes and #7 WOTY are front and center. There is no question in my mind that this is deliberate deception.
We don’t know if the second batch, made from bulk wine, was exported to the U.S., was intended to be exported to the U.S., or was to be sold in Australia. But that does not matter, not even a little bit, IMO. Nor does the $20 price point.
Lew,
I was just poking a bit of fun. We all have our days. I have been known to go a round or two past what should have been the end on this board too. COUGH … understatement … COUGH. While I think the legal issue is a stretch, the ethics here is enough to get me to avoid buying from this producer … were I ever to buy a shiraz again which is unlikely given the current messed up state of my palate. Support the good guys and leave the bad guys to their own … anyone still watching Two and A Half Men?
Well stated, Scott. And I’m pretty sure I’ll never buy Schild wine as long as I live!
As the former importer of Schild Estate I do feel a need to give this story some balance, at least from my perspective. Whilst we can all look at this with some shock and dismay, my personal belief is that there was more naivete involved than any attempt to deceive. I knew Ed Schild, patriarch of this family, fairly well and found him unfailingly decent, loyal, ethical and humble. Despite his enormous success, he is essentially a farmer, savvy about accumulating substantial vineyard holdings in the Barossa throughout a lifetime of extremely hard work, but not a worldy man, and I don’t believe he would do anything knowingly to damage the family name and his legacy.
One board member mentions “a fellow named Tyson Stelzer” from Australia. This happens to be, along with James Halliday, one of Australia’s most prominent wine writers and reviewers. I can understand that many Americans wouldn’t know who he is, but conversely Australians are far more likely to look to James Halliday, Tyson Stelzer and Winestate for their reviews than say, Wine Spectator or Wine Advocate. So when Schild Estate said they were committing all the WS rated wine to the US and bottling another closely matched batch to extend their domestic sales for a short while until the next vintage, they did not (IMHO) consider that this would impact the US or US sales. Naive, yes. But I can’t imagine they would do something like this knowing that it could permanently damage the brand in the country that brought it to such ratings heights and sales volume.
Schild Estate, with vineyards that are the most extensive among family ownership in the Barossa, and include some of the oldest Shiraz vines, could reasonably engender envy among others in the area. I find the method of raising the issue by going straight to the media somewhat self-serving. Continually commenting on it on several boards and then joking about something so serious I find in bad taste. People who live in glass houses…
I know this is my first post on this board and there will be those who take issue with my comments and perhaps see them as inflammatory, which is not my intent. As an importer in the US, Schild Estate is now my competitor as well, but I have no axe to grind. Rather than delight in the potential demise of a wine I no longer represent, I felt an obligation to come to the defense of a family I continue to hold in high regard.
Thanks Deborah. Despite this being your first post here I know people appreciate the additional perspective. And many of us remember your contributions on EBob as well. Hopefully you will feel comfortable here and continue to post.