The Open Thread posted at the beginning of the month has gotten really, really big, so I've gone ahead and made another one. Post your new discussions here!
This thread is for the discussion of Less Wrong topics that have not appeared in recent posts. If a discussion gets unwieldy, celebrate by turning it into a top-level post.
If "top winery" means "largest winery", as it does in this story, I don't see how it says anything about the ability of tasters to tell the difference. Those who made such claims probably weren't drinking Gallo in the first place.
I think it's closer to say they were passing off as cheap, something that's actually even cheaper.
Switch the food item and see if your criticism holds:
Wonderbread, America's top bread maker, was conned into selling inferior bread. So-called "gourmets" never noticed the difference! Bread tasting is a crock.
If people who can tell the difference are a big enough demographic to sell to, then they are employed by all wineries, regardless of quality. But an alternate explanation is that Gallo was tacitly in on the scam - they got as much PN as Sideways demanded, without moving the market.