Wine scandal in Italy threatens key agricultural export

Italy's wine industry, a major sector of the nation's economy, faces a devastating blow. The industry has been hurt by the sale of low-priced wines that contain illegal amounts of methyl alcohol (wood alcohol). The tainted wine has been found responsible for the death of 22 Italians.

The loss to both present trade and the image of Italian wine abroad is enormous, experts say, and government estimates foresee a 30 percent decrease in wine exports, amounting to a loss of about 250 billion lire ($160 million).

Government agricultural spokesmen say the wine scandal began last December. Since then about 15 people from some six centers which distribute bulk wine have been accused of selling wine containing illegal amounts of methyl alcohol. This bulk wine is used by smaller winemakers for blending. Methyl alcohol is normally present in minuscule proportions in wine as a result of the natural fermenting process. In some cases, however, it was added to cheap wines to increase the alcohol content.

The charges against those accused have subsequently been changed by Milan authorities to first-degree murder.

So far more than 60 bottling plants and wine producers have come under legal investigation. A few of them have been found to have used the lethal bulk wine for blending.

``Obviously there is going to be a strong emotional reaction against Italian wines,'' says Ezio Rivella, managing director of Villa Banfi, a US firm based in Italy, and the largest producer and exporter of Italian wines to the United States. ``We have to ask the government to give the exact facts. Our clients must be given guarantees that they are buying a genuine product.''

The US is Italy's third largest foreign client for wine, after France and West Germany, and in 1985 purchased 21.6 percent of Italy's wine exports.

So far the Italian government, whose agriculture minister, Filippo Pandolfi, has been accused of tardy reaction to the scandal, has issued a decree demanding stiff control and tests for methyl alcohol content on all wines with guarantee labels on bottles produced for export.

Little of the adulterated wine has been found abroad. The US Bureau of Alcohol, Tobacco, and Firearms announced Tuesday it would drop restrictions on the importation of Italian wine, after reaching an agreement with the Italian government under which the wine can be certified free of contaminant.

Still, wine producers here face innumerable canceled orders from regular foreign clients. Franco Zuffellati, export manager for Zonin Cantine, one of the biggest Italian exporters to the US, says he waited in vain this year for 60 California clients to come for their annual visits and place their orders. One by one they all canceled, he says.

``No country has closed its frontiers to Italian wine,'' says Pannin Finotti of the Italian Confederation of Agriculture, a government-sponsored agricultural trade association. ``But wine trade will not recover before the end of this year.''

The drop in exports will also affect employment in wine-producing regions.

``Wine growing employs more people than any other agricultural sector,'' says Michele Branca, agricultural expert in the government Institute for Foreign Trade. ``Wine is Italy's third most important agricultural export after cereals and fruit and vegetables, and it is essential . . . that it regain its position.''

Few wine producers see much hope for recovery this year. The Ministry of Agriculture has allocated $4 million for promotion campaigns and subsidies for Italy's wines. But most analysts say it will take more than publicity campaigns to put the industry back on sure footing.

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