The Frank-Rombauer Cellars Fiasco and other deals that smell...

As some readers are aware, the Hanns Kornell Champagne Cellars was summarily ripped from its owners by Napa Valley Bank for the pleasure of an executive of Walt Disney Corporation, Rich Frank, and his side-kick, Koerner  Rombauer. Ultimately the offending bank was merged out, though of little solace to many others who have also found their properties ripped from them.
The former Kornell facility located south of Calistoga came to be known  as Frank-Rombauer Cellars, and gained in name recognition when it caught  fire almost a year ago, resulting in the loss of nearly 90,000 cases of wine, mainly OPW or "other peoples' wines". The tragedy that ensued left small wine producers devoid of inventories of their 1998 releases, yet harmony appears to have been achieved as no litigation has been filed thus far against Frank and Rombauer.
However, people came to question just what was going on -- Frank Rombauer Cellars is located in the Agricultural Preserve where industrial activities are barred -- including wine warehousing. The Planning Department and Planning Commission of Napa County determined to learn more -- in fact
Frank-Rombauer was remiss in reporting its activities such that an agreed-upon hearing could not be held in 1999.
What gives these people privilege to over-run laws? Old fashioned schmooze, pure and simple. The name of Los Angeles transplant "Doumani" is invoked, or the name of a local law firm is cast into documents as "owned by Frank-Rombauer". They are rather "wired" guys with a syndicate of
friends and a bevy of attorneys that include Keker & VanNest. They paint themselves  victims, while having victimized others. Their records disgorged paint a  clear picture of many of their illegal activities, while schmooze buys  sealed lips and fear grips others from obtaining just recourse.
One of the labels Frank-Rombauer claims to own is "La Dame de Shanghai"  per a letter dated December 19, 2000. The public is invited to judge the merits of this operation that in fact does more to discredit Napa County than some of its judges. And you can be the judge of whether or not
they actually own the label. See: In fact you can be the  judge about whether or not this website is even legal, given the fact that direct sales of alcoholic beverages over the internet have been banned by Federal law.
We find at the site La Dame de Shanghai is a California sparkling wine made in methode champagnoise with ginseng additive. Notice the "generic" California, ask yourself if you can even believe that this elixir was made  by methode champagnoise, and bear in mind the FDA does not permit herbal additives in foods or beverages. Click.
Frank Rombauer was restricted to production of wines or champagnes made from grapes grown in Napa County. Where's Napa on the label? Frank and Rombauer would have you turn the bottle
around, to point out "bottled and produced in St. Helena, Ca" as though this is the origin of the fruit,
capitalizing on the public's lack of knowledge of label requirements.
This is but one of many problematic activities at the site. The production of vinegar and vermouth are at least two other known problems --  neither permitted and neither bonded at the site. In fact, no one even knows if they have a proper ATF bond for what they are doing -- mainly making still wine rather than champagne -- and from bulk wine imported from who knows where.
Frank-Rombauer list a range of other labels as "theirs" that in fact hail from Chicago and New York -- and again, same problems -- not made from Napa fruit or clearly not businesses owned by them despite their assertions of owning the labels.
One local resident who has challenged their use permit in days past commented "it's time to let the cat out of the bag, put the truth on public record. But the press, including 'The San Francisco Chronicle,' is so supportive of them there is never a story that would otherwise alert an  unwary public." And that's the point. The several unresearched articles  that appeared in "The San Francisco Chronicle" were purely based on a complaint filed by Frank-Rombauer with no consideration given to digging for the truth. The paper has long been touting the dark side by its
failure to research the facts or even interview the other parties.
What we found hard to digest are the issues Frank-Rombauer raise about their label being ruined when salvaged wine was re-sold but not scrubbed of  its labels. Pity. What a "San Francisco Chronicle" writer failed to do  was look into just what labels they could and could not use by law. Had  they done so, they would have realized that Frank Rombauer was legally barred from using some labels that "went up in flames." In fact, even before salvaged wine was released Frank Rombauer had filed two new labels, one Winston Hill and the other Frank Family Estates. Yet they claim damages likely in the millions from wholesalers that didn't "scrub off the old labels" to preserve their non-existent reputation.
Only by looking through line item details from truck traffic reports that are a part of the public records in Napa County's Planning Department were we able to see that more than 20 wineries were doing business under  their roof, about a half dozen of these operate in other counties, and
most of Frank-Rombauer's production was not Napa wine.
Meanwhile, Frank-Rombauer has assured the Planning Department that by the end of July they will provide a complete list of all wines lost in the fire. NewsMakingNews stands ready to reprint this list upon release with additional information to heighten consumer awareness.

June 7, 2001, New York Times

F.D.A. Warns Food Companies About Herbal Additives


The Food and Drug Administration warned companies putting herbal additives in food yesterday that their products could be illegal because the "novel ingredients" might not be generally recognized as safe.

Saying that the herbs have never been approved for consumption in food, the agency has sent warning letters to three companies whose products contain ginkgo biloba, Siberian ginseng and echinacea, popular ingredients that have increasingly made their way into dozens of food items and drinks.

Letters to more manufacturers will follow over the next week, the agency added, as part of a newly invigorated effort to protect what it calls "the integrity of the conventional food supply."

For months, F.D.A. officials have watched with concern as food companies have peppered their products with ingredients that were once found only in herbal medicines sold in health food stores. Yet this is the first time that the agency has directly challenged the practice of adding relatively common herbs like echinacea and ginkgo to food that now appears on grocery store shelves across the nation.

The three companies to receive the first round of warning letters — Hansen Beverage Company, U.S. Mills and Fresh Samantha, which is owned by Odwalla — are all relatively small compared with some of the giant manufacturers that also put the herbs in foods and drinks.

But while the initial enforcement effort had a limited reach, F.D.A. officials said they hoped it would put all manufacturers on notice that the agency may ask them to come forward with scientific evidence to prove that their ingredients are safe.

"There are hundreds of these products and hundreds of companies," said Dr. Christine Lewis, director of the F.D.A.'s office of nutritional products, labeling and dietary supplements. "There's no reason to think that any of them are any different."

Indeed, PepsiCo's panoply of SoBe beverages and the Cadbury Schweppes line of Snapple drinks both have products with echinacea in them, just as ginkgo biloba and Siberian ginseng can be found in any number of drinks sold by several major manufacturers. When asked whether the agency's scrutiny would extend beyond the handful of companies initially chosen and fall on many others as well, Dr. Lewis replied, "They should take note."

Defending his products, Hansen's chairman, Rodney C. Sacks, said the company had no immediate plans to remove echinacea from its drinks, and would strive to prove the herb's safety.

"There are millions of bottles from dozens and dozens of manufacturers on the shelves around the country with echinacea," Mr. Sacks said. "We've never had a complaint from anyone."

A spokeswoman for Fresh Samantha said officials there had not yet received the letter, while U.S. Mills officials could not be reached for comment.

Under the law, food producers are only allowed to add ingredients that the F.D.A. has approved ahead of time, or those that are generally recognized as safe by scientists. Otherwise, the agency can deem the products adulterated and move to order them off the market.

While there is little evidence to show that the herbs in question are dangerous in food, there is scant proof that they are safe. In fact, though few significant adverse reactions have been associated with ginseng or echinacea, many researchers think that ginkgo may exacerbate bleeding or even cause hemorrhaging when taken in conjunction with certain medications, particularly anti-coagulants.

If the F.D.A. expands its scrutiny to include all food and drinks with these herbs, many companies will suffer a significant economic blow. Herb-infused drinks are the fastest- growing segment of the beverage business, according to Frost & Sullivan, a market research firm.

In 1997, the market for herb-laden food and beverages totaled no more than $20 million in annual sales. After big manufacturers like Pepsi and Cadbury became involved, bringing the rainbow-colored drinks to convenience stores nationwide, the figure jumped to $700 million last year, offering one of the best engines for growth in an industry otherwise struggling for more revenue.


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