Peter Yealands’ winemakers told staff to 'audit proof' wines while breaking international rules

Founder Peter Yealands and former senior staff have been sentenced for breaching the Wine Act – the first time in NZ history.

A prominent wine company's been fined over 'deceptive conduct' involving nearly 3.8 million litres of wine exported to Europe.

Yealands Estate Wines, its founder and former senior staff have today been sentenced in Blenheim for breaching the Wine Act - the first time there's been a breach in New Zealand since it was introduced in 2003.

“This is unacceptable offending,” says Ministry for Primary Industries compliance investigations manager Gary Orr.

“It was deliberate deceit. It was designed to hide the offending from the regulator”.

The company, Mr Peter Yealands, former chief winemaker Tamra Kelly and winery operation general manager Jeffrey Fyfe plead guilty to a total of 39 charges.

They involve inaccurate record keeping and false statements made between May 2013 and December 2015 - breaking rules on how wine, destined for Europe, can be sweetened.

Judge Hastings described the volume of wine in question as “substantial”.

“Inaccurate records were maintained in relation to 6.6 million litres of wine, of which nearly 3.8 million litres was exported to the European Union”.

Adding sugar to wine is allowed in many countries, but not in the EU after fermentation.

Jeff Fyfe and Tamra Kelly said they had felt under pressure to keep up production after the vineyard was damaged in the Kaikoura earthquake. They told staff to alter records to conceal the activity and "audit proof" the wines.

Two staff members raised their concerns but were told not to worry and to drop the matter - but one of them did mention the addition of sugar with Mr Yealands himself.

Mr Yealands lawyer, Rachael Reed QC, told media “he takes responsibility for that”.

“He deeply regrets not stopping what was going on”.

Yealands Estate was fined $400,000, while Mr Yealands and former staff will pay up to $35,000 each.

The company has new owners and says breaches of this kind won’t happen again.

Industry players react

Wine exports are worth $1.3b a year to the NZ economy.

Wine writer Michael Cooper told 1 NEWS the country is seen to have “a well organised, well regulated industry”.

“The issue is of course where you've got 700 wine producers, inevitably there are going to be people who are going to want to take shortcuts for their own pecuniary advantage”.

Mr Cooper says its unlikely to have a serious international impact “because although these are unethical practices and they breach rules they're not actually hazardous in terms of people's health”.

The New Zealand Wine Association says the industry “has been badly let down by Yealands’ actions”.

But chair John Clarke says he’s confident the industry can overcome “this disappointment”.

“The message for wineries is clear: follow the rules or you can expect enforcement to follow.”

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