The surprise fall from grace of Raphaël Michel’s Guillaume Ryckwaert
By Richard Siddle and Cruz Liljegren
News this week that specialist French bulk wine broker Raphaël Michel has been caught up in the centre of a fraud scandal involving its chairman and the alleged passing off of potentially 4m cases of Rhône wine has sent alarm bells through the bulk wine sector.
Particularly as Raphaël Michel is such a significant player for sourcing bulk wine from either its own vineyards or the 15 co-operatives it works with across the Rhône valley. It also runs other bulk operations in Provence, the Languedoc-Roussillon, Chile and Argentina working with some 4,000 growers all of which adds up to a total turnover of over €90m.
For its chairman to be involved in such a serious criminal investigation will have a major knock-on effect on the rest of the bulk wine sector. Whatever the outcome. It is, however, early days in that investigation and the trade would equally do well not to jump to too many conclusions before the full facts are made clear.
Here is what we know so far:
- It is alleged that the fraud includes the passing off as much as 300,000 hectolitres (up to 4m cases) of wine classified as Vin de France as Côtes du Rhône, Châteauneuf du Pape and other AOC.
- The charges all stem from an enquiry by Marseille’s arm of the National Customs Judicial Service which, according to Wine Spectator, had noticed “a great number of violations” covering October 2013 to March 2017 during a routine audit of Raphaël Michel’s records. The company has apparently been under investigation by French customs since last autumn.
- Guillaume Ryckwaert, chairman of Raphaël Michel, and several company managers were taken in to police custody in Marseille on June 27. They were held for 48 hours after which Ryckwaert was charged with fraud, and deception and violations of the consumer and tax codes. The other managers were released.
- Ryckwaert was then released on bail of €1.2m, placed under supervision and ordered to have no dealings with the company during the investigation.
Raphaël Michel is yet to release any official statement, but its attorney, Olivier Morice, according to reports in the French media, has denied any wrongdoing by his client.
But what is clear is that this is not an overnight swoop by French authorities. Philippe Pellaton, president of the Syndicate of Vignerons of the Côtes du Rhône et Côtes du Rhône-Villages, told Wine Spectator this week that it was first aware the company was under investigation last autumn.
Bad timing
This is of particular surprise to VINEX as one of the site’s freelancers, and independent bulk wine consultant, Cruz Liljegren, was invited as part of a high profile press trip to Raphaël Michel between June 15-16. A trip hosted by Ryckwaert just 11 days before he was arrested and charged.
It makes the comments made by Ryckwaert during that press trip even more important and pertinent that it was felt at the time.
He was keen, says Liljegren, to explore the relationship between traditional co-operative wine producer models and bulk wine brokers like itself. He also explained in detail how it was changing its business model to be more relevant and effective for its buyers customers.
For example he told Liljegren how it was working hard to consolidate its New World wines in a new `Oenotria-Cluster´ in Milan which would allow European buyers to access wines from Chile, Australia and South Africa within 15 days. A facility capable of allowing buyers to order as little as 100 hectolitres if they want.
He also explained why brokers of its scale were better placed to work with major retailers and customers than individual co-operatives. “Buyers can source wines purchased from one of the many suppliers in the region,” he said. “We are not dependant on what a specific co-operative is producing, but can select and blend according to the wants of the buyer. What makes the whole difference is the availability of specific appellations such as the Rhône Valley, Languedoc, Provence and the South West. Thanks to our `Oenotria-Cluster´ we can even offer wines from the New World.”
That said he was also keen to protect and stand up for the future of co-operatives which from the outside appear to be in trouble. “If you just look at the figures, then sure, this is how it looks like. But also consider that there has been a great deal of fusions between companies, a survival strategy that helps the co-operatives get a larger production, which, in turn, allows them to out-price their smaller competitors.” That said he agreed it was “likely the co-operative model will have to be re-organised somehow for it to be successful in the future”.
He also talked about the importance of China as a key export market and how it was now able to ship wine direct from its facility in Chile to China. “This is a strategical decision as Chile and China has a free tax agreement,” he said. “I believe the key to success in China is to be re-active to trends in the market and learn to price correctly and in line of the quality of the product.”
What role Ryckwaert, personally, has in shaping that future now lies in the French courts.