Yealands Estate Wines has pleaded guilty to “unprecedented offending” under the Wine Act 2003 and has copped a $400,000 fine.
The Ministry for Primary Industries prosecuted Yealands “for deliberate, deceptive and sustained breaches” of the Act.
It laid a total of 39 charges in the Blenheim District Court against the company, its founder and director at the time of the offending, Peter Yealands, former winery operations general manager Jeff Fyfe and former chief winemaker Tamra Kelly,
The company and the three individual defendants were immediately sentenced after their guilty pleas were recorded.
On top of the company fine, Fyfe and Kelly were each fined $35,000 and Yealands was fined $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 European Union regulations, MPI says.
The offences relate to records of more than 6.5 million litres of wine and about 3.7 million litres were exported to Europe between May 2013 and December 2015.
MPI’s manager of compliance investigations, Gary Orr, claims the prosecutions show 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,” Orr says.
“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,” he says.
“Peter Yealands was made aware of what was happening at the time but failed to do anything to stop it.”
Orr says the MPI investigation took almost two years to complete and reveal that one of New Zealand’s leading wine companies “engaged in deliberate deception through the use of falsified records that were designed to deceive routine audit.”
“As a general rule, the wine industry is compliant and law-abiding. That’s why this offending is very disappointing,” Orr says.
The outcome of the prosecution “will act as a strong deterrent to anyone engaging in non-compliant behaviour under the Wine Act.”
Electricity lines company Marlborough Lines bought a controlling stake in Yealands Wine Group in 2015. It acquired the last 14 percent in July from Peter Yealands, who quit as a director the same day.
Current Yealands chief executive Adrian Garforth is playing down the company’s part in the proceedings. The company is legally responsible for the actions of some former staff members, even though they were employed before his time and the company’s ownership has changed, he says.
“The wines were destined for European Union markets and were not sold under Yealands brands,” he says.
“Yealands has co-operated fully with the MPI investigation as soon as the errors were brought to their attention in early 2016” and the company took “immediate and decisive action” to remedy the issues well before any charges were laid, he says.
“Systems we have introduced, training and comprehensive audits mean that our wines are fully compliant and breaches of this kind will not happen again,” Garforth says.
“These events, which predate my appointment, do not reflect our company values and our desire to do everything to the highest possible standard. We have taken these charges very seriously.”