ATF Settles Cases Against Rabbit Ridge

San Francisco, CA - John A. Torres, Division Director, Bureau of Alcohol, Tobacco and Firearms (ATF), announced today that ATF accepted two Offers In Compromise to settle issues disclosed during a six month investigation into violations of numerous Federal laws and regulations at Rabbit Ridge Vineyards Winery, Healdsburg, CA. ATF accepted the first Offer In Compromise, in the amount of $750,000, which addressed violations relating to mislabeling wines, recordkeeping, and operating as a bonded winery and wholesaler without the proper permits. The second Offer In Compromise, in the amount of $60,000, was accepted to compromise penalties relating to failure to file semi-monthly wine tax returns.

The investigation disclosed violations in all three areas that ATF regulates in winery operations: Product Integrity, Revenue, and Permit/Application. The various violations were documented for a period spanning over six years.

The case began after ATF received information that Rabbit Ridge was involved in a mislabeling scheme. The allegation was that Rabbit Ridge supplied labels to a wholesaler for use on a wine bearing another label. The wholesaler was to remove the labels currently on the wine and replace them with labels representing a higher demand product. This information prompted a full scale investigation, during which we found over 17,000 cases of wine that were mislabeled with geographic, varietal/brand names, vintage dates, and other claims, that were not appropriate to the wine in the bottle. ATF also disclosed over 28,000 cases of wine with no source records to support the claims on the label.

Division Director Torres commented, "This is a significant investigation. The information ATF inspectors uncovered and documented reflected jeopardy to the revenue and consumer deception. Left unchecked, labeling violations of this type could undermine consumer confidence in American wine". Torres went on to say "by and large the wine industry should be commended for its integrity, and willingness to comply with ATF regulations. However, when we receive information that any winery may be misleading consumers, we are committed to investigating and taking action that will end any unlawful practices."

Acceptance of these Offers In Compromise effectively closes this matter.