Castel's wines have put the family on France's rich list

It's only the third time in its history that the authority has sanctioned a company for "failure to notify."The two previous fines were ten times lower than that imposed on Castel Freres, at 392,000 euros ($538,541) and 400,000 euros ($549,500).

In imposing its fine on Castel's parent company, Copagef, the competition authority (L'Autorite de la concurrence) said it wanted to stress the "gravity"of the failure and the way that "Castel Freres had deliberately ignored its obligations in order to quickly complete the transaction."

The level of the fine took account of the company's size.

Castel bought six companies from Patriache in May 2011 without advising the authority, which is primarily charged with verifying that acquisitions do not infringe French laws on competition.

"The transaction was brought to the authority's attention by a third party,"the competition watchdog noted. After conducting an investigation, it validated the acquisition in July 2012, despite Castel's already significant share of the mass-market wine sector.

The authority noted at the time that the entity created by the acquisition owned "several labels from this category (notably Vieux Papes, La Villageoise, Cambras, Cramoisay, Champlure and Lichette), some of which seem to be ubiquitous."

While validating the acquisition, the authority had doubts about the way it had been conducted and reserved the possibility of imposing a financial penalty.

It has now ruled that the Bordeaux company "knowingly exempted itself"from the obligation to notify which applies to this type of transaction. As a result, Castel committed a ’serious violation"which "obstructs the control of mergers,"the authority said.

"Castel's violation is even less excusable when it's explained by an approach where the sole aim was the rapid achievement of the merger,"it added. "The evidence indicates the adoption of a deliberate strategy"on the part of Castel, which "formally decided against verifying its obligation to notify."

L-R: French agriculture minister Stephane Le Foll greets Pierre Castel at Vinexpo; Castel's estates include Chateau Ferrande

The company is able to challenge the authority's decision by taking the case to the Council of State. Contacted by AFP, Castel refused to comment.

A spokesperson for Patriarche said the company would not comment "on a decision by an administrative authority."He told AFP that Patriarche did not wish to "enter a legal debate."

Established in 1949 by nine siblings, Castel has gradually become the leading producer of wines in France and Europe, with a presence in 130 companies including China and Russia. It owns 1,400 hectares of vineyards and 21 cateaux, of which 17 are in Bordeaux.

Castel also owns the wine merchant Nicolas (475 shops in France and 55 internationally). It makes the second-bestselling beer in Africa and is the longstanding owner of the Cristalline brand of bottled water.

France's Challenge magazine has ranked the company's founding president, Pierre Castel, and his family as the eighth wealthiest in France with assets worth 7 billion euros ($9.61 billion).

Patriarche, established in 1780, markets prestigious appellations such as Montrachet, Meursault, Pommard and Nuits Saint-Georges, as well as mass-market wines including Couvent des Visitandines (Burgundy) and Pisse-Dru (Beaujolais).