While prospects for insolvency have captured the attention of those following the W. J. Deutsch's lawsuit against Ascentia Wine Estates (AWE), the process has unleashed a series of  corporate mismanagement allegations against  CEO Jim DeBonis.

"Eight Estates [a former name for AWE] may or may not be insolvent in a purely technical sense," said one source associated with the process. "But there is no denying that it has serious sales and financial problems, most of which result from executive mismanagement. That said, the company's only way out of its financial jam may be to file Chapter 11 in order to force debtors to restructure its debt."

That source, along with 17 others interviewed by Wine Industry Insight, spoke only upon a guarantee of confidentiality, some because they were not authorized to speak with the media and others fearful of  "blowback."

"This is messy and going to get a lot messier before it's over," explained one source. "There will be collateral damage. People are going to get shot in the crossfire."

ALL SOURCES GIVEN OPPORTUNITY TO CORRECT & COMMENT

On Sunday evening, Wine Industry Insight emailed a draft of this article to DeBonis, Peter Deutsch and to all sources requesting corrections and additions by noon Monday. While not a standard WII practice, the shortcomings inherent in articles that rely heavily on unnamed sources demand an extra effort to insure a fair, accurate, complete and contextually accurate article.

Information from anonymous sources is never used by Wine Industry Insider unless it is corroborated by legitimate documents or by two or more independent sources.

Neither Deutsch nor anyone from his organization had any comment.

An email from DeBonis read, "Thanks for the opportunity, you definitely have your facts all wrong. I cannot get back to you by noon, but I will later on."

WIN had not received anything from DeBonis by 4:30 p.m. when this article was sent to subscribers,

In addition to its sources, Wine Industry Insight also relied upon W. J. Deutsch's legal complaint filed in Delaware Chancery Court.

DEUTSCH RAN OUT OF PATIENCE, FILED SUIT

"Bill Deutsch got tired of being ignored," said a source familiar with the controversy. "He felt stonewalled, lied to and believed that his legitimate concerns had been ignored. But you have to remember that he's also in litigation with another investment, Renwood Winery. I think he pulled the legal trigger so quickly on this one because he felt his patience with Renwood had been taken advantage of and he was not going to let that happen again."

"Even though WJD has a 27-percent interest, the rest is in the hands of Jim's allies, with GESD holding a whopping majority," said the source.

Ascentia acquired eight orphan Constellation Brands in June of 2008 as part of the $208,770,900 million deal that created AWE.

In that deal, all of AWE's land and wineries were acquired for $115 million by SBV VinREIT, an LLC operated by Kansas-City-based, Entertainment Properties Trust (NYSE:EPR). All the wineries and vineyards were then leased back to Ascentia.

VIP Subscribers click here to read the complete, un-redacted, 2,617-word original article.

Also In This Article:

The full text of the following sections is available to VIP Premium Subscribers).
  • GESD PROVIDED BULK OF FUNDING, GOT HEFTY FEES
  • GIRAUDO ONLY INVESTOR NOT SUED
  • AGREEMENT KEPT DEUTSCH FROM PROPER DUE DILIGENCE
  • IMPOSSIBLE FOR ASCENTIA TO MAINTAIN PREVIOUS SALES LEVELS
  • DEBONIS SHOULD HAVE KNOWN ABOUT "INFLATED FINANCIAL PROJECTIONS"
  • GESD THREATENED TO SUE IF DEUTSCH INVESTIGATED
  • MEDIA GIVEN WILDLY CONFLICTING ASCENTIA SALES FIGURES
  • ASCENTIA: NO STRATEGIC PLAN + INABILITY TO MOVE QUICKLY
  • DEBONIS NO "FREDDIE FRANZIA"
  • FINANCIAL WOES PROMPTED ATTEMPT TO SELL BUENA VISTA WINERY
  • VINREIT NIXED BUENA VISTA SALE
  • BUENA VISTA "LAME" BRAND HURT POTENTIAL SALE
  • BUENA VISTA NOW MOTHBALLED, HOPING FOR CUSTOM CRUSH
  • BARGAIN BASEMENT SALES OF WINE TO INVESTORS & INSIDERS PROVIDED STOPGAP CASH, DEPLETIONS
  • ASCENTIA TOO "BIG CORPORATE" FOR OWN GOOD
  • TOP EXECS FAILED TO HALT "TOXIC ENVIRONMENT"

Not a VIP subscriber yet?

Subscribe now, and get the rest of this 2,617-word original article along with everything else on the site every day for just $9.99 per month or $115.88 per year. Click here for more details.

Flawed British Study & Factually Inaccurate Article Slam Women’s Moderate Consumption

A contextually and scientifically flawed British medical paper released on Feb. 24 could frighten women away from moderate alcohol consumption and — ironically — cause many of them to die prematurely of cardiovascular disease.

The sensational article, based on the study “Even moderate drinking affects women’s cancer risks,” made global headlines by warning that:

“Drinking just a glass of wine a day increases women’s risk of breast cancer, as well as several other types of the disease, a new study concludes. The research, carried out among more than a million UK women, says that alcohol accounts for 5,000 cases of breast cancer every year.

ARTICLE, PAPER OMIT VITAL INFORMATION

Both the syndicated newspaper article and the actual medical paper omitted the vital scientific fact that scores of peer-reviewed studies, published over the past 20 years agree unanimously that people who consume alcohol in moderation live longer than either abstainers or heavy drinkers.

This longer life span, according to the research, comes from a 30 to 50 percent drop in deaths from cardiovascular disease — the number one killer in the developed world.

Moderate consumption is usually defined as one drink per day for women and one or two for men.

UNETHICALLY GLARING OMISSION

The most glaringly unethical omission appears near the end of the article — written by syndication staffers of BMJ Publishing Group, a company which also owns the British Medical Journal.

Under the headline: “What does this mean for me?” the article states:

“Just about everything we do has risks. We can’t avoid risks altogether, but knowing about them can help us make decisions we are comfortable with. It’s been clear for some time that alcohol is a factor in women’s risk of getting cancer, especially breast cancer. This latest study puts some figures on that increased risk. You may find that this helps you decide whether you are happy with the amount of alcohol you drink.”

Of course, valid behavioral decisions need to be based on a consideration of all risks and benefits. By raising the question of what this study’s finding’s meant for individuals, they raised the obligation to provide context regarding overall death rate by failing to present their study in context, this article only frightens readers without informing them.

FACTUALLY INACCURATE AND UNWARRANTED CONCLUSION

In addition, the article’s statement that: “It’s been clear for some time that alcohol is a factor in women’s risk of getting cancer, especially breast cancer….” is false.

Actually, it has NOT been clear. Research does not support this conclusion at all. In fact, the research over the past 20 years has all been equivocal, with some studies — like the current one — finding a connection and many others not.

The Framingham Heart Study and the U.S. Women’s Health Study are among those finding no connection.

Unlike the extensive body of research consistently finding the connection between moderate consumption and longer life, no such consensus has emerged with regard to cancer.

LIES, DAMNED LIES AND STATISTICS

The syndicated newspaper article, based on work published in the BMJ’s Journal of the National Cancer Institute, aptly illustrates Mark Twain’s adage that there are three kinds of falsehoods: lies, damned lies and statistics.

Like it or not, all the data available on health and moderate alcohol consumption are based on statistics and a discipline known as epidemiology. The connections between smoking and lung cancer, high cholesterol and heart disease and other now-well-known phenomena were first made through epidemiology.

TEASING TRUTH FROM STATISTICS

As the cigarette companies persuasively argued for decades, statistical indications are not conclusions on which personal health decisions can be made. It’s one of the few truthful statements they ever made.

But how do you know if a conclusion can be reasonably warranted? Epidemiologists offer three solid indicators:

1. Is the data consistent from study to study? Do the vast majority reach the same outcome?

2. Is there a valid physiological, biochemical or other scientific mechanism which could explain the phenomenon and outcome?

3. Does a “dose-related” pattern emerge? An effective medicine, aspirin for example, shows a small effect when small amounts are taken, a better effect when more is taken and then negative side effects when too much is taken. This shows a direct connection between the data and the phenomenon being investigated.

THE CANCER LINK FAILS THE THREE-STEP TEST

The article currently making global headlines, along with others looking for connections between cancer and moderate alcohol consumption fails the three step test.

The body of studies are equivocal, no plausible physiological mechanism has been established and no does-related phenomenon has been established.

In fact, the “no safe level” of exposure conclusion from the study seems to put women’s moderate alcohol consumption into the same category as cigarette smoking and nuclear waste.

IS THE MODERATE CONSUMPTION-BREAST CANCER LINK A STATISTICAL ARTIFACT?

Some data suggests it is an artifact resulting from the education and socio-economic patterns of women’s alcohol consumption.

This is the conclusion of a team of Veterans Administration physicians lead by Dr. Randall P. Harris, M.D., Ph.D., of the American Health Foundation. In a chapter on breast cancer and moderate consumption, my 1992 best-seller, The French Paradox and Beyond, I reported:

“Their logic goes as follows:

(1) Alcohol consumption increases linearly with education. Only 39 percent of women with less than nine years of education call themselves drinkers; that rises to about 70 percent for women with 16 years of education.

(2) Well-educated women most often postpone pregnancies, often into their late 2Os and 30s; less-educated women frequently have children in their teens.

(3) Breast cancer risk increases as the onset of the first pregnancy is postponed.

Therefore, the increased risk of breast cancer may be due to the postponement of pregnancy among educated women — who tend to drink more and postpone pregnancy - and not to alcohol consumption (which is perhaps only indirectly and not causally related).

Supporting this hypothesis is the fact that almost all of the studies which showed a positive relationship between alcohol and breast cancer showed the highest risk among thin drinkers.

This is at odds with general data that shows obese women to be at higher risk for breast cancer. The explanation? Highly educated women (who drink more and who postpone their first pregnancy) tend to be thinner than less-educated women. Thinness, then, is also indirectly (but not causally) related to breast cancer.

However, thinness could be related in another way. The same amount of alcohol consumption would produce a higher level of blood alcohol in thin women than in those who are larger, thus accentuating the effects of alcohol.

Science simply has no conclusive answer on these hypotheses.

ENTIRE FRENCH PARADOX BOOK ONLINE FOR FREE

After four printings and more than 100,000 copies sold, The French Paradox and Beyond is out of print. Astonishingly, none of the book’s conclusions have been overturned by science in the years since it was first published.

Indeed, the evidence has grown stronger for the cardiovascular effects, and new research has shown even more positive effects of moderate consumption, including those for Alzheimer’s, osteoporosis and more.

The book is free, but still under copyright. If you use portions, I ask only that you credit the source and provide a link to it (http://www.french-paradox.net/book/) to allow others to use it as a resource.


A NOTE: Most of the author’s courses in college consisted of math, physics, biology and other sciences. The author, Lewis Perdue, is on a first-name basis with both the science and the mathematics associated with this and similar studies. He graduated with distinction from Cornell University. He finds junk science offensive.

Further, Perdue does not make wine, sell wine or have any connection to any company selling wine or any form of beverage or product containing alcohol. And rather than cozy up to the industry, he spent most of the 1990s angering many in the wine business with his persistent reporting and does not plan to alter that behavior.

Posted by lperdue on Feb 26th, 2009 and filed under Featured Articles. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

4 Responses for “Flawed British Study & Factually Inaccurate Article Slam Women’s Moderate Consumption”

  1. ian says:

    excellent post
    you’re helping to expose this garbage for what it is, junk science

  2. lperdue says:

    Someone should. It’s hard for the non-scientist to see where the holes are.

  3. Bob says:

    Great post but I’m worried that we’re losing the battle. I read some stories today about new possible limits on wine in France, based on supposed cancer concerns.

  4. lperdue says:

    Yep … With AWARE dead, AIM in a coma and The Wine Institute no longer having any research and education program, seems like the industry has declared a Bush-like “Mission Accomplished” and is just sitting around waiting to be blindsided.

Leave a Reply