Faking it: Fake wine is on the rise

The power of a brand.  Status. Wealth. Luxury.  Lust.  All things that run through the subconscious as you salivate over those Manolo Blahniks, a bottle of Chanel No. 5 or that divine tan Hermès Birkin (why, this writer is having a ‘brand lust moment’ as we speak).

fake

 

Drool worthy leather goods aside, brand driven desire also runs deep in the beverages business filling us with a palpable want to have that coveted bottle of wine or bubbles.  And don’t we know it! (Dom Perignon anyone?) This burgeoning obsession with luxury wines has seen prices sky-rocket and, as with other high-end goods, the fakes have followed.

Counterfeit wine can exist as a few different beasts.  It can mean the intricate work of carefully placing phoney labels (or labels from top drops) onto bottles of cheap wine.  Or, it can mean pouring a less expensive wine into an empty wine bottle and resealing it.

Anti-counterfeit lawyer, Nick Bartman, describes counterfeit wine as ‘any element of wine that is not original’. [1] This could mean the appellation, grape variety or use of a winery name.  Basically anything that’s misleading, all wrong or, more to the point, pretending to be something it aint.

The market swells

With wine increasingly being bought for investment purposes coupled with a boom in consumer demand, recent years have seen prices reach astronomical levels.  In 2010 (the year considered to be the height of the Asian wine boom) a bottle of Châteaux Lafite-Rothschild 1869 set a record selling at a Hong Kong auction for $232,692.

At an estimated $2,000 a sip it would certainly be one to savour. If it’s ever opened that is. [2]

So why do these investments in wine often turn out to be ‘lemons’? Like many things, big money attracts big crooks and hence, the fakers are born.

Fake wines destroyed in Nanning (Image courtesy of Reuters, www.thedrinksbusiness.com)
Fake wines destroyed in Nanning (Image courtesy of Reuters, www.thedrinksbusiness.com)

 

In China, there is huge economic growth coupled with a large class of ‘nouveau riche’ that don’t need just the latest and the greatest ‘must-haves’ but also the most expensive.[3] A marketer’s dream!  Add to the mix a relatively new wine drinking culture that lacks the knowledge of what to look for on a bottle and you have it; some serious coin to be made by selling fakes.  Whether it be small amounts of fine wine, or large parcels of everyday quaffers the margins are there to be made.[4]

These fakes are not always sold knowingly either (although many are).  Sometimes shop owners sample the genuine product, place an order and are then sent fakes. Regardless of the intent, the practice of counterfeit wine in China is well ingrained with Bartman estimating that 70% of the wine he saw in China in 2010 was counterfeit. [5]

Busted!

There have been more than a few big busts, but we’ll mention just a couple here.  Notably, last year California-based wine collector Rudy Kurniawan was arrested and later found guilty for his involvement in counterfeit wines.  Over eight years, Kurniawan allegedly bought and sold millions of dollars’ worth of counterfeit wine.

His caper was to refill empty wine bottles with less expensive wine and fit them with fake labels. In 2006 some of his biggest sales were made with about $38 million of wine sold at two auctions, all of it assigned by Kurniawan.[6]

As recently as August 2013, a Chinese fake wine ring was busted in China with $32 million worth of stock.  Like a drug den, they found all the things needed to make their contraband; label rolls, bottles and corks.  At least 10 suspects were arrested in this bust.[7]

It’s these kinds of practices that have resulted in empty wine bottles being smashed after tastings, as with some bottles fetching a tidy £300 ($AUD 500) on the black market, taking an empty vessel home is a lucrative proposition.[8]

A hefty damage bill

One school of thought is that if your wine is being counterfeit you have hit the big time.  You know, ‘imitation is the sincerest form of flattery’ and all that jazz.  However, when it goes too far the damage bill to your brand and reputation can be devastating.

A prime example is the famed Château Lafite Rothschild that was faked to such an extent that wine shops in China won’t even sell it as no one believes it’s the real deal.[9] Particularly done to death was the 1982 vintage which was known as one of the best vintages of its time.  It has even been suggested that more bottles of it have been sold than were ever made.[10] Doesn’t quite add up, does it?

A future for the phoneys?

There’s nothing new about the counterfeiting of designer goods and with wine now position as another piece of the luxury goods pie it’s unlikely that the industry will ever be completely immune.  Nonetheless, how the industry reacts and works to protect its brands will play a large part in beating the fakes.

Of course, some buyers just don’t care. They want the status symbol of ‘that’ wine bottle, real or not.[11]

Benfolds

Most of us, however, would rather go without. The romance of owning that prized bottle of Burgundy’s Domaine de la Romanée-Conti is about being given VIP access to the terroir; the essence of the land, climate and geography of a place.  No phoney can reproduce that.

Now, anyone for a lovely glass of ‘Benfolds’?

 

Follow Jo on instagram @joanna_schmidt_wine and on twitter @JoSchmidtWine



[1] Nick Bartman in Robinson, J 2010, ‘Fighting fraud in China’, JancisRobinson.com, viewed 20 September 2013, <http://www.jancisrobinson.com/articles/a201005193.html>.

[2] Frank, R 2010, ‘Most expensive bottle of wine ever sold at auction’, The Wall Street Journal, viewed 26 September 2013 <http://blogs.wsj.com/wealth/2010/10/29/most-expensive-bottle-of-wine-ever-sold-at-auction/>.

[3] Shaw, L 2013, ‘Fake wines on the rise in China’, The Drinks Business, viewed 22 September 2013, <http://www.thedrinksbusiness.com/2013/06/fake-fine-wines-on-the-rise-in-china>.

[4] Nick Bartman in Robinson, J 2010, ‘Fighting fraud in China’, JancisRobinson.com, viewed 20 September 2013, <http://www.jancisrobinson.com/articles/a201005193.html>.

[5] Bartman, J 2013, ‘Fighting fakes in China – part 2’, JancisRobinson.com, viewed   5 January 2014, <http://www.jancisrobinson.com/articles/a201005193.html>.

[6] Hellman, P 2012, ‘FBI Arrests Wine Collector Rudy Kurniawan, The WineSpectator.com’, viewed 20 September 2013  <http://www.winespectator.com/webfeature/show/id/46509>.

[7] The Wine Cellar Insider 2013, ‘Massive Chinese wine counterfeiting ring busted with 7,000 fake cases’, viewed 23 September <http://www.thewinecellarinsider.com/2013/08/massive-chinese-wine-counterfeiting-ring-busted-7000-fake-cases/>.

[8] Moore, M 2011, ‘Empty bottles sell for £300 pounds in China’, The Telegraph, viewed 27 September 2013, <http://www.telegraph.co.uk/foodanddrink/wine/8246212/Empty-wine-bottles-sell-for-300-in-China.html>.

[9] Gray, B 2013, ‘Cracking the case on counterfeit wine’, Winesearcher.com, viewed 25 September 2013 <http://www.wine-searcher.com/m/2013/08/cracking-the-code-of-counterfeit-wine>.

[10] Jones, TJ 2013, ‘Amid China’s boom, fake wines proliferate’, New York Times, viewed 25 September 2013, <http://www.nytimes.com/2013/06/10/business/global/amid-chinas-boom-fake-wines-proliferate.html?_r=0>.

[11] Gray, B 2013, ‘Cracking the case on counterfeit wine’, Winesearcher.com, viewed 25 September 2013 <http://www.wine-searcher.com/m/2013/08/cracking-the-code-of-counterfeit-wine>.