Dominique Giroud, 43, was taken into custody on Wednesday on suspicion of ordering the hacking of computers belonging to journalists who were investigating him over allegations of fraud.
He has been remanded in custody until July 14th.
If found guilty, he could be sentenced to up to five years behind bars.
A professional hacker, private detective and Swiss intelligence agent have also been arrested in connection with the case, the Geneva prosecutor's office said on Friday.
Giroud, whose company Giroud Vins is based in the southwestern canton of Valais -- Switzerland's largest wine-growing region -- has been dogged by scandals for years.
His reputation has been so tarnished that he has even tried to change the business's name to Chateau Constellation, although it was rejected by regional authorities.
Giroud opened a small-scale business in 1995 with reportedly just 1.5 hectares of vineyards to his name and saw that swell to an estate of around 50 hectares.
His castle-like winery on the outskirts of Sion, Valais's capital and largest town, opened its doors in 2008 and is reportedly valued at around 15 million francs ($17 million).
Giroud claims to sell up to nine million litres of wine each year, and is estimated to rake in around 50 million francs in sales, according to Swiss weekly Le Matin Dimanche.
With his ballooning fortune he sponsored numerous sports clubs across Switzerland, opened a restaurant in Singapore and started a chain of Wine Universe stores, the paper reported on Sunday.
'Giroud is Scarface'
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The wine producer is also said to be renowned for his ruthless tactics.
"Giroud is Scarface," one unnamed Valais wine industry source told the paper, referring to Al Pacino's hubristic mob boss character in the 1983 movie.
"He thought he was God. He thought he was above everyone," another said, while a third recalled how Giroud liked to brag that he alone could bring down both Switzerland's banking and wine industries if he wanted to.
Swiss authorities opened a tax fraud probe against him in 2011, and two years later demanded he pay 9.54 million francs in back taxes.
In February this year, national broadcaster RTS reported that he had illegally blended some 350,000 litres of wine between 2006 and 2009, passing it off as pure.
He also tried -- and failed -- to stop two RTS documentaries about his business from being aired last month.
The arrests last week centre on alleged attempts to hack the accounts of journalists at RTS and the Le Temps daily in an apparent bid to find the sources for their reporting on Giroud.
The private detective and the hacker say they carried out the spying on orders from their long-time business associate, the intelligence agent -- also a childhood friend of Giroud -- Le Matin Dimanche reported.
Both the private detective and the hacker reportedly attempted the operation thinking they were acting for the government.
The wine producer's lawyers insist he never gave his blessing to the hacking, while the agent has claimed through his lawyer that he had warned the group it was illegal.