The Vales Wine Company Pty Ltd and two of its former directors, Michael Von Berg and Claude Curtis, were convicted today of falsely representing the vintage and description of quantities of bulk wine in contravention of the Trade Practices Act, 1974.

Justice O'Loughlin, of the Federal Court, convicted The Vales Wine Company on four charges relating to the sales of bulk wines in 1991 to 1992 to a number of major Australian wineries. The sales involved volumes of wines of between 30,000 litres and 198,000 litres.

The Court found that representations were made to the various wineries that the wines were varietal wines such as shiraz, and cabernet sauvignon but that the wines supplied were in fact blends.

The Court also convicted the two former directors for aiding and abetting the Vales Wine Company to contravene the Act in relation to the sale of cabernet sauvignon to one winery.

Justice O'Loughlin said the evidence of winemakers who had purchased the wines showed that they did so " a result of first sampling the wine and each conceded that the relevant blend profile ... could not have been detected as being a wine different to that which had been ordered. This evidence...shows how much our wine industry is dependent upon the integrity of winemakers and wine manufacturers".

The Australian Competition and Consumer Commission initiated the action in December 1993 after the Australian Wine and Brandy Corporation had audited The Vales Wine Company's records and discovered some anomalies.

"The purpose and effect of the deception was to effectively double the price of the wine sold and indicated a company policy to sell inaccurately described wine," ACCC chairman, Professor Allan Fels, said today.

"The Australian wine industry has a good reputation for the quality of its wines and this type of conduct damages that reputation both at home and overseas. Consumers should be confident that product description is an accurate reflection of the contents. The ACCC has an important responsibility to ensure that companies do not mislead their customers in ways which could damage such a valuable domestic and export industry."

The court has adjourned the matter until 3 June for submissions on penalty.