Home Finance Counterfeiting Is a Lingering Stain on the Wine Industry

Counterfeiting Is a Lingering Stain on the Wine Industry

1795
1
Advertisement
NeuroTags ad

Melanie Young

Counterfeit wines and spirits cost the global industry $3.18 billion in direct sales, and the impact can be felt at many levels. A European Union Intellectual Property Office (EUIPO) report estimates that illicit trade in wine and spirit results in a 7 percent reduction of legitimate products, the loss of over 7,000 jobs across the beverage alcohol industry, and costs the government $2.61 billion in tax revenues.

And yet, this malpractice continues to run rampant in the beverage alcohol sector.

The effects go beyond the bruised egos of billionaire collectors: Vendors and suppliers will effectively tarnish their reputation when the inauthenticity of their goods come to light. A producer’s brand identity is impacted by illegal misrepresentation and sales. Unsuspecting consumers of wine—in all price brackets—are duped.

Walker Strangis of Walker Wine Company previously worked for an auction house that had unknowingly brokered the now infamous Rudy Kurniawan’s counterfeit wines. The experience impacted him deeply. “It was a large amount of wine. Some we rejected, and others we did not [reject] turned out to be counterfeit. We needed to have taken more time and been more cautious and careful. It felt like I had been both betrayed—and committed a betrayal. Wine collecting at this level is often treated and traded like a commodity, but it’s also intensely personal. Knowing that I played some part in passing along the fraud was nauseating,” Strangis says.

A glass of red wine on a background of $100 bills.
“It felt like I had been both betrayed—and committed a betrayal … Knowing I played some part in passing along the fraud was nauseating,” —Walker Strangis / iStock

Preventing a Counterfeit Purchase

Note: Counterfeiting is not limited to rare and fine wines. Asia is notorious for making counterfeits at all price points and even hosts wine fairs actually promoting knockoffs. In fact, Maureen Downey, a global expert in counterfeit wine and owner of Chai Consulting, who advised the Department of Justice and FBI on the Rudy Kurniawan case, defines “wine fraud” quite broadly as “the sale of products which are misrepresented as being authentic, healthy, in proper and undamaged condition, and/or legitimately sourced when they are not.”

In order to prevent occurrences of wine fraud, David Parker, CEO of Benchmark Wine Group, advises collectors to do their homework and buy from reputable commercial sources that offer recourse.

“Unless you have developed special relationships with top European sources and custom importers, buying from Europe is risky,” he says. “Never buy from Asia due to the high amount of counterfeit and poorly stored wine there. Never buy from private individuals, which is illegal under federal and state law and is how much of the counterfeit wine enters the system.”

Further, he notes that any purchase from a charity auction should be seen as a donation, not an investment. “These bottles are frequently not verified and often a way for other collectors to dispose of bottles of questionable authenticity or condition,” Parker says.

Melissa L. Smith, founded Enotrias to provide wine appraisal in addition to her services as a certified sommelier. She advises restaurateurs to conduct monthly inventories, monitor which employees have access to the cellars, and destroy all empty bottles—which could end up refilled and resold.

Identifying a Fake

For those interested in official verification, that requires a specialized expert—someone with a background in forensics and education surrounding wine provenance. “You need to build files and be familiar with what bottles look like in all vintages, even back to 1811 Château d’Yquem,” says authenticator, William Edgerton of Edgerton Wine Appraisals.

Authenticators like Edgerton examine a bottle’s label for misspellings, altered words, and punctuation errors. They’ll look for anomalies in ink, paper color, texture, uneven label placement and signs of glue. An ultraviolet flashlight can pick up whether brighteners were used in the label, a practice not used before the 1950s.

Vintage label design paper texture background, isolated on white
Authenticators look for clues such as paper color, texture, uneven label placement and signs of glue. / iStock

Bottle size can be another clue: A magnum of an older vintage such as 1961 Bordeaux or 1945 Domaine Romanée Conti would be questionable. “Many producers did not utilize the five-liter format until 1978,” said Edgerton.

Experts agree better oversight is needed. “Consumers must expect more and do their homework. Vendors need to be harder on the industry and take more responsibility. They need to stop selling bottles they know are damaged or fraudulent. We need to shut down unlicensed sellers and hold perpetrators accountable,” said Downey.

Finding Recourse

To avoid becoming a counterfeit victim, Downy advises investors to ask questions and demand tangible answers about the provenance of potential purchases. “Ask online vendors for their licenses. Vet vendors by asking others about them on public forums like wineberserkers.com or bordeauxwineenthusiasts.com,” he adds.

But if buyers discover they have, in fact, purchased counterfeit bottles—they need to take steps to rectify the situation. First, have an independent authenticator inspect the bottles. If found to be counterfeit, contact the vendor. “The victim should demand full, current value—plus expenses—and renumeration for all bad purchases. Under no circumstances should a victim return the bottles to the vendor; they will resell them and make a second profit,” says Downey.

He also recommends identifying perpetrators on public forms like winefraud.com to warn others. Though many victims are embarrassed and don’t speak out, silence only shields the counterfeiters. Adds Downy, “Without the assistance of diligent consumers who are willing to speak out, wine and spirits fraudsters and their vendors will continue to thrive.”

_______________________________________________________________________

Melanie Young produces and hosts The Connected Table Live and The Connected Table Sips podcasts featuring conversations with global thought leaders in wine, food, spirits, and hospitality, and Fearless Fabulous You, a lifestyle show for women. The Connected Table LIVE is ranked #4 in Feedspot’s Top Food & Drink Podcasts for 2021. Her articles on wine and spirits and the business of wine have been published in Wine Enthusiast, Wine4Food and Seven Fifty Daily. Her food articles appear in Santé Magazine. For 20 years she ran M Young Communications, a culinary marketing and events agency in New York, and advised many global wine organizations and businesses. During that time, she was responsible for the launch and management of The James Beard Foundation Awards, serving as the Director for 16 years. Melanie is a member of Les Dames d’Escoffier International, the Wine Media Guild and Women of the Vine & Spirits.  

Website: www.theconnectedtable.com | IG: @theconnectedtable | TW: @connectedtable

 

 

 

Advertisement
Previous articleAfternoon Brief, February 7th
Next articleImporter of Barton & Guestier Wines Changes Name and Expands Presence

1 COMMENT

  1. $3.2B annually is Wine AND Spirits…massive fraudulent wine, really a huge problem? Read the article – huh, it emphasizes Scotch & Cognac fraud, clickbaiting is so misleading here it’s sad.

    In a previous study, EUIPO estimated that counterfeit trading in GI products such as Scotch whisky and Cognac amounted to around €2.3bn in 2014, representing approximately 4.8% of total GI product purchases in the same year

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.