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Rabbit Ridge Pays Record $810,000 Settlement for Mislabeling Wines

The ATF uncovers violations at the Sonoma County producer that involved 45,000 cases of wine and dated back to 1994.

Tim Fish
Posted: November 8, 2001

That bottle of Rabbit Ridge wine you uncorked might not be the wine you think it is. The embattled Sonoma County winery is paying a record $810,000 to the Bureau of Alcohol, Tobacco and Firearms to settle charges that it sold wines with the wrong labels.

The settlement, the largest ever paid by a California winery, involved possible mislabeling on 45,000 cases of wine and followed a two-year investigation that uncovered violations dating back to 1994, according to ATF spokeswoman Marti McKee.

While agreeing to the settlement, which closes the federal agency's investigation, the winery did not admit any wrongdoing. "There is no admission of guilt on their part, and it's not required," McKee said. "What we're trying to do is correct something, not punish someone."

Rabbit Ridge owner Erich Russell did not return calls requesting comment.

McKee would not say which specific Rabbit Ridge wines were mislabeled. The ATF's official statement said that 17,000 cases of wine "were mislabeled with geographic, varietal/brand names, vintage dates and other claims that were not appropriate to the wine in the bottle." Another 28,000 cases had "no source records to support the claims on the label."

The ATF would not say how many mislabeled wines actually reached consumers, but the wines might still be available in the marketplace. "We do not recall wines for mislabeling," McKee said.

Rabbit Ridge paid $750,000 to settle the mislabeling charges and $60,000 for tax violations.

The settlement comes just when things seemed to be looking up for the Healdsburg winery, which has had a difficult year. In October, Sonoma County reinstated the winery's 50,000-case use permit, which the county board of supervisors had revoked in April, following a lengthy legal dispute over land-use violations. Rabbit Ridge paid $500,000 to settle that case. Russell has since put the Healdsburg facility on the market with a $5.5 million asking price, while he builds a new winery near Paso Robles, on California's Central Coast.

The ATF uncovered the Rabbit Ridge violations during an investigation of San Francisco-based wholesaler Chambers & Chambers, McKee said. Acting on a tip, the ATF discovered that employees in the wholesaler's Hawaii office were relabeling wines.

Chambers & Chambers is paying $35,000 to settle their case. Frank Rollins, the company's general manager, declined comment, saying only that Chambers & Chambers no longer distributes Rabbit Ridge wines.

McKee said mislabeling violations are generally rare in California. However, last year, in similar settlements, C. Mondavi & Sons paid $300,000 for violations involving its CK Mondavi brand and Bronco Wine Co. paid $750,000 in a case involving its Forest Glen, Napa Creek and Rutherford Vineyards brands.

"For California wine to be competitive both nationally and internationally," McKee said, "there has to be integrity on the label."

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Read recent news about Rabbit Ridge:

  • Aug. 7, 2001
    Rabbit Ridge Owner Puts Sonoma Winery Up for Sale

  • July 24, 2001
    Rabbit Ridge Reaches $500,000 Settlement With Sonoma County

    Read past news about labeling violations:

  • Sept. 8, 2000
    C. Mondavi & Sons Pays $300,000 to ATF to Settle Labeling Case

  • Aug. 22, 2000
    Bronco Wine Co. Pays ATF $750,000 to Settle Label Dispute
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