Twelve producers and traders from the southwest of France have been found guilty of fraud after selling millions of bottles of fake Pinot Noir to E&J Gallo.
According to the Times online, the fraudsters made €7 million (£6 million) profit by passing off cheaper Syrah and Merlot grape varieties as Pinot Noir, which Gallo US sold under the Red Bicyclette Pinot Noir brand.
Investigators became suspicious in 2008, after realising that large amount of Pinot Noir was being exported from the Languedoc-Roussillon.
The court passed suspended prison sentences and fines ranging from €3,000 to €180,000.
Susan Hensley, vice president of public relations for E. & J. Gallo Winery said: "We are deeply disappointed to learn today that our supplier Sieur d'Arques has been found guilty of selling falsely labeled French Pinot Noir as recently as March of 2008.
"Based on the available information of the Pinot Noir that the French courts have investigated, Gallo imported less than 20% of the total and is no longer selling any of this wine to customers.
"We believe that the only French Pinot Noir that was potentially misrepresented to us would have been the 2006 vintage and prior. We want to assure our consumers that this is not a health and safety issue and that we will continue to work with the appropriate U.S. authorities to determine any next steps required for potentially mislabeled Pinot Noir in the marketplace."