The U.S. government loaned $2.3 million to a Prohibition-era wine kit — sold with a 'warning' explaining exactly how to turn it into wine.
When Prohibition outlawed alcohol, Section 29 of the Volstead Act left a gaping loophole: non-alcoholic grape products were perfectly legal to sell, and people could make fruit juice from them at home. California's grape growers drove a truck through that loophole with Vine-Glo, a concentrated grape brick launched in 1929.
Vine-Glo was invented by Joseph Gallo — father of Ernest and Julio Gallo, who would later build the largest winery in the world. It was sold by Fruit Industries Ltd, a front company for the California Vineyardist Association.
The product's genius was its 'warning label.' One salesperson famously cautioned customers: 'Do not place the liquid in this jug and put it away in the cupboard for twenty-one days, because then it would turn into wine.' The instructions for breaking the law were disguised as instructions for obeying it.
Astonishingly, the federal government helped fund the operation. The Federal Farm Board loaned Fruit Industries $1,300,000 to get started, and advertisements proudly promoted the Farm Board connection while declaring Vine-Glo 'legal in your own home.'
The scheme was a runaway hit. One million gallons of Vine-Glo sold in the first financial year alone, available in eight wine-flavored varieties, and the product spread across the entire United States.
When Vine-Glo launched in Chicago in 1930, Fruit Industries published a statement claiming Al Capone had threatened to force them out of the city. Historians believe the gangster threat was likely invented as a publicity stunt.
Assistant Attorney General Mabel Walker Willebrandt — the government's top Prohibition enforcer — ruled Vine-Glo legal, and the Bureau of Prohibition told its agents not to interfere with shipments. Then she stepped down and promptly became Fruit Industries' attorney, a conflict of interest that deeply embarrassed the government.
The end came in October 1931, when a federal judge ruled in United States v. Brunett that grape concentrate could not legally be used to make wine at home — just weeks after the Farm Board had loaned the company another $1,000,000. Fruit Industries shut down Vine-Glo a month later.