The Dominion Post

Yealands export risks spilling NZ reputation

- Hamish Rutherford hamish.rutherford@stuff.co.nz

One of Marlboroug­h’s leading wine companies, its founder and two staff have been accused of putting the industry’s reputation at risk after millions of litres of wine was illegally exported to Europe.

Yealands Estate, its founder Peter Yealands, former manager Jeff Fyfe and former chief winemaker Tamra Kelly have been convicted of a string of offences related to activity that took place from 2013 to 2015.

Under the direction of Fyfe and Kelly, sugar was added to wine after fermentati­on, with official records falsified to cover up the activity.

Although adding sugar to wine in the post-fermentati­on phase is allowed in most countries, it represents a crime in the European Union, related to ancient French law.

A total of almost 4 million litres of wine was exported to Europe in breach of the export regulation­s, although Yealands Estate said this represente­d about 7.5 per cent of its exports to the trading bloc during the period of the offending.

Yealands Estate was fined $400,000 by Judge Bill Hastings in the Blenheim District Court yesterday. Fyfe and Kelly were fined $35,000 each.

Yealands was found to be less culpable because while he was not directly involved in the activity, he knew of the offending but did nothing to stop it. He was fined $30,000.

The prosecutio­n, brought by the Ministry for Primary Industries (MPI) after a two-year investigat­ion, represente­d the first charges laid under the Wine Act 2003.

Officials are on high alert because of the risk that the incident could damage New Zealand’s reputation in Europe, where trade negotiator­s are trying to progress a free-trade deal.

New Zealand’s wine exports have grown to be worth $1.3 billion a year.

Stuff has been unable to report anything about the case after Yealands Estate was granted a widerangin­g suppressio­n order against the news publisher back in July.

The offending took place before a controllin­g stake in Yealands Estate was sold to Marlboroug­h Lines in mid-2015.

Marlboroug­h Lines is owned by a trust, which is ultimately owned by anyone in Marlboroug­h who buys electricit­y. Chairman David Dew refused to comment yesterday. ‘‘Now is not the time to talk.’’

MPI head of investigat­ions Gary Orr said that at no time was there any risk to public health from the episode.

But he said the actions by the group put the reputation of the industry at risk. ‘‘This is unacceptab­le offending. It was deliberate deceit, designed to hide the offending from the regulator.’’

Yealands Estate said in a statement that the offending took place under its former ownership and steps had been taken to ensure it did not happen again.

Rachael Reed, a lawyer for Peter Yealands, said her client took responsibi­lity for what happened, although she described the provision under which he had been charged as ‘‘obscure’’.

Kelly and Fyfe quickly left court after sentencing. Both have refused to comment.

Kaiko¯ ura MP Stuart Smith said it was ‘‘very disappoint­ing’’ that the Marlboroug­h and national industries’ reputation­s had been put at risk.

‘‘I think it’s a small risk, but it’s a risk nonetheles­s. This is a product that lives and dies by its reputation, and it should be a reputation for honesty and good practice.’’

‘‘It was deliberate deceit, designed to hide the offending from the regulator.’’ MPI head of investigat­ions Gary Orr

 ?? RICKY WILSON/STUFF ?? Peter Yealands, left, and Tamra Kelly, right, arrive at the Blenheim District Court in November. The pair, as well as another former senior manager, Jeff Fyfe, were sentenced and fined yesterday.
RICKY WILSON/STUFF Peter Yealands, left, and Tamra Kelly, right, arrive at the Blenheim District Court in November. The pair, as well as another former senior manager, Jeff Fyfe, were sentenced and fined yesterday.
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