The national wine co-op has been implicated in trying to sell fake champagne to Europe and the US, report David Beresford and Mungo Soggot
THE national co-operative which controls South Africa’s wine industry, KWV, has been implicated in a major swindle involving the attempted sale of fake champagne to Europe and the United States.
Documents obtained by the Mail & Guardian indicate senior KWV officials were party to the fraud, which involved counterfeiting and the attempted sale of 240 000 bottles of bogus champagne into the international wine market.
The alleged fraud revolves around attempts to market two brands of fake champagne – “Paul Lambert” and “Charles Lemond” – in the early 1990s. It appears to tie in with other international scandals involving attempts to market fake versions of two of France’s most famous brands of champagne, Mot & Chandon and Dom Perignon.
Senior officials at KWV named in the documents have flatly denied any knowledge of the Paul Lambert and Charles Lemond operation. They say they have never heard of the two brands of “champagne” and have no knowledge of the documents themselves, which include memos and faxes on KWV letterheads.
KWV (Kooperatiewe Wijnbouwers Vereeniging), the national wine co-operative, has various statutory obligations to maintain standards in the industry. It also has a joint controlling interest in the country’s two largest liquor producers, with a combined turnover totalling at least 70% of wine and liquor sales.
Hugely wealthy, KWV is currently the subject of a battle for control of its assets, totalling an estimated R1,6- billion. Its 4 751 members – almost all of them white farmers and producers – are demanding that the co-op be privatised.
Minister of Agriculture Derek Hanekom – who is arguing that the assets are profits from apartheid and that KWV should be treated as a national asset – is trying to block the move.
There have been suspicions of South African involvement in international champagne frauds since the late 1980s.
In 1991, three fraudsters – Jean-Claude Rmaury, Charley Delmare and Marc Proux- Delrouyre – were arrested in Paris in connection with a champagne-counterfeiting scam involving operations in Cuba and South Africa.
Proux-Delrouyre was stabbed to death in his home before he could be brought to trial – a murder which has never been solved. Delmare and Rmaury were convicted of counterfeiting and fraud, and were sentenced to 18 months in jail and a fine of 100 000 francs. In a separate civil claim, Mot & Chandon were awarded damages of Fr5-million against them.
In 1993 there was more hard evidence of South African involvement in a champagne swindle when police seized 900 000 fake Mot & Chandon and Dom Perignon labels which had been printed in Stellenbosch and were awaiting shipment to Panama. Panama and Cuba have figured prominently in champagne frauds.
Last year, after a lengthy police investigation, the attorney general’s office in the Cape announced there was insufficient evidence to justify any prosecutions in connection with the fake labels.
It was reported that, during their investigations, police seized documents showing KWV had exported nearly one million litres of Chenin Blanc and Columbard wines to Cuba in 1990 which had been ordered by “two foreigners”. The attorney general’s office said there was no evidence of bad faith on the part of KWV.
The use of the term “champagne” is strictly controlled by international law and treaty. To qualify for the description, the wine must be produced from grapes grown in the Champagne district in north-eastern France; the entire production process – including a secondary fermentation process which must take place in the bottle in which it is finally sold – has to be carried out in the demarcated area; and the final product requires a certificate of authenticity issued by the Comit Interprofesssionel des Vins de Champagne.
The documents obtained by the M&G indicate the Paul Lambert and Charles Lemond “champagnes” were made with South African wines and bottled in South Africa with counterfeit labels complete with fake French coding. The Comit Interprofessionnel du Vin de Champagne, the champagne regulatory body in France, has confirmed neither brand exists. A representative said Paul Lambert was on its blacklist of counterfeit brands.
KWV apparently imported 240 000 premier- grade champagne bottles from one of France’s major manufacturers, St Gobain, for the operation.
Senior officials with KWV International named by the documents as being involved in the operation – codenamed “Project Spark” – include Niel van Staden, currently divisional executive with responsibility for overseas markets, including the US; Dr Danie Retief, an executive director; and J “Kobus” van Niekerk, managing director. Van Niekerk was out of the country this week and not contactable. Retief and Van Staden emphatically denied any knowledge of the operation.
A fax on a KWV letterhead dated August 28 1990 records that on June 27 1990 Van Staden met Marc Reyes (an alleged accomplice in the 1991 Mot & Chandon case), Fritz Coetzer (a Stellenbosch export agent) and a Mr Hartman (believed to have been an American agent) to discuss Project Spark. “Discussions reached an advanced stage and in fact the Design Services Dept were briefed on label designs,” it states.
The fax says the label designs were presented to the four men by July 6. “The product was tasted and approved. Dr Retief approved the project in principle on June 29 1990, and in his absence Mr J van Niekerk obtained approval on July 23 1990 for the project to proceed provided that orders were received for the full 20 000 cases and acceptable guarantees.”
Retief approved the ordering of the bottles on August 3 and “KWV proceeded to order 252 000 bottles from France, 240 000 corks from Portugal, printed with the word Champagne, as well as 240 000 gold foil capsules. The value of these goods is R663 000.”
An internal memorandum dated September 6 under Van Staden’s name gives detailed instructions to another member of KWV for the ordering of labels for the bottles of Paul Lambert and Charles Lemond, and stickers for their cartons. The memo concludes in Afrikaans: “Remember South Africa must not appear anywhere on any of the packaging materials and neither must the name of the suppliers.”
It is not clear from the documents what happened to the fake champagne. But in 1991 America’s Bureau of Alcohol, Tobacco and Firearms (BATF) discovered fake champagne was circulating in the US under the Charles Lemond and Paul Lambert labels. The wine was traced back to an import agency, California Clearing, in the town of Tustin.
Subsequently several thousand cases of Charles Lemond materialised at a Customs auction in Cape Town. Customs officials told local traders the wine had been returned to South Africa after it had been refused entry into the US, and was being sold to defray storage costs.
A condition of sale was that it could not be resold. Customs said no guarantee could be given that it had been made by the “Methode Champenoise” method. This was despite the fact that labels described the wine as champagne.
The M&G submitted a series of questions to Customs on Wednesday morning regarding the auction, including the circumstances in which the wine was seized; details regarding its previous ownership; whether it was aware its claim to be champagne was fraudulent; whether potential bidders were warned of its fraudulent nature; and whether a fraud inquiry was carried out. Customs had still not replied by the time the M&G went to press.