A judge ordered a cumulative bail of €65 million (£56m) be set for six defendants in the case, and the court is asking for up to €25m in damages – based on information that the fraudulent scheme helped the company to generate more than €14m in net profits between 2019 and 2021 alone.
The case started in late 2021 when news broke that three Denominations of Origin (DOs) in the Catalunya region – those representing Montsant, Priorat, and Terra Alta – had filed legal proceedings against the wine company, Reserva de la Tierra, for alleged fraudulent labelling practices.
Hundreds of spindles holding tens of thousands of forged bottle labels were discovered at premises in the town of Les Borges del Camp (Tarragona) by the Catalan police, els Mossos de’Esquadra.
Based on the find, the DOs of Tarragona and Catalunya then joined in the prosecution as well.
According to reports in August 2022, private equity group Sherpa Capital acquired Reserva de la Tierra’s assets, with the company having previously filed for bankruptcy. The new company was named Terra Cellars.
During a recent court hearing, prosecutors said the fraud was carried out via a complex scheme of certifying smaller amounts of wine legally within the DOs and then increasing the total quantity with large amounts of additional, uncertified wines through various subsidiary companies.
Police found that a firm in southern Spain printed more than 81 million false labels.
Additionally, some wines were labelled with names that had never been registered with the DOs they were purported to have been certified under. The wines found in the discovery process are listed below, but the court judgment said there could be others.
False age statements, such as Gran Reserva, were also used in some instances, alongside misleading statements about oak barrel ageing.
In one year, investigators found the claimed production of ‘DOQ Priorat’ wines was 44% of the region’s entire output. In another year, 12 million bottles had been labelled as ‘DO Terra Alta’, which is five million more than the region’s 50 wineries produce collectively.
All five DOs affected told Decanter that the scale of the case was unprecedented, and they’ve pursued it to the maximum extent possible to make sure that consumers continue to have faith in their respective institutions.
According to reports, after acquiring Reserva de la Tierra assets in August, Sherpa Capital said it would install a new management team at the company and invest to grow the business.
Commenting on the latest developments, Vicenç Ferré, president of DO Tarragona, told Decanter, ‘All the previous registered brands have been nullified and will not be permitted for registration. We have received a request from the new company, Terra Cellars, to register new wines and we’re currently taking them into consideration.’
When asked about Reserva de la Tierra, Xavier Pié, the president of DO Catalunya said, ‘Well, that’s a company that doesn’t exist anymore. There’s a new company now and hopefully a new path will be taken. It’s easy to see the value in desiring a wine to be under a denomination of origin as it gives value to the brand which we need to stand behind.’ He also confirmed that Terra Cellars has made a request to register several new wines under the DO.
Local wine website, Vinassos has also found that despite the pending judgment, the company continues to sell wines branded ‘Elegido’, albeit without any DO certification.
Wine brands identified in the case, for which no certification exists
DO Terra Alta: ‘Escal Roja’, ‘Heredad Cheroga’, ‘Bota Real Gran Reserva’, ‘Valentía Simba Lion Crianza’, ‘Heredad Valentía’, ‘Barón de Gerard’, ‘Vega del Origon’, ‘Bota Real Crianza’, ‘Bota Real Reserva’, ‘Bota Real Gran Reserva’, ‘Vilamar Reserva’, ‘Vilamar Gran Reserva’.
DO Catalunya: ‘Nerea Crianza’, ‘Nerea Reserva’.
Wine brands identified with falsified ageing statements
‘La Baturrica’ as Gran Reserva in DO Tarragona, ‘Vespral’ as Gran Reserva and Reserva in DO Terra Alta, ‘Viña Carles’ as Crianza in DOQ Priorat, ‘Castillo de las Veras’ as Gran Reserva in DO Tarragona, as well as ‘Puerta de Plata Reserva’, ‘Clos del Solisticio’ as Gran Reserva and Reserva, ‘Armónico’ as Selección, Grande Selección, and Gran Reserva in DO Terra Alta.