In other words it was a perfect market in which to begin counterfeiting products, and the process happens on every level – from the almost comically bad fakes, which are simply any empty bottle filled with a vaguely wine-like substance, and covered in a clearly fabricated label printed on cheap paper, to expert counterfeiters buying old wine bottles, reverse engineering the various dust particles and characteristic tearing that indicates the right age, and filling them with a carefully mixed combination of other wines and various substances that almost perfectly emulate the right smell and texture.
Naturally there are many safeguards in place against this; and just as naturally people will always find ways against them.
What follows is a quick overlook at some modern anti-counterfeiting methods, market analysis, and some basic conclusions about the issue:
In France there are several types of security in place to guarantee the authenticity of a bottle, including special seals to check whether or not the bottle had been tampered with (counterfeiters work around this by simply making a small hole at the bottom of a bottle, emptying the wine and replacing it with something else before patching up the bottle), and scannable paper markers (which are really only effective if everyone had a specific scanner) Wine labels are protected under AOC (Appelation D’origine controlee, or controlled designation of origin, now known as Protected Designation of Origin.), which is sort of like patenting a trademark. It guarantees a wine’s region of origins. It is possible to track the progress of various bottles, but again, none of this is foolproof.
The most promising and recent security system is called Prooftag, which generates a random pattern of bubbles on a tag to be later affixed on to a bottle (Code a bulles, or bubble code). In effect, every new pattern is unique and instantly identifiable, reminiscent of fingerprints. This is thus far the safest method, as the bubble codes cannot be replicated, although it is not very widespread yet. The second phase of this process is called Geowine, which would involve compiling a comprehensive database of all bubble patterns (again, like a fingerprints index) Wineries have also been developing their own barcode marking systems, some of them going as far as including mobile apps to scan specially marked bottles (such as My Wine Registry or Smart Bordeaux). While effective on a smaller scale, these methods are still unable to keep up with recent counterfeiting trends.
Although not a current problem, there have been instances where counterfeit wines represented a health hazard, whenever counterfeiters were mixing in random chemicals to the wine so as to create a sweeter flavor, or a darker color. Twenty-three people died in 1986 because a fraudulent winemaker in Italy blended toxic methanol (wood alcohol) into his low-alcohol wine to increase its alcohol content.
One of the more publicised cases of wine counterfeiting involved an individual who passed himself off as a wine connoisseur for years, spending hundreds of thousands of dollars on a lavish lifestyle, while at the same time purveying auction houses and individuals with hundreds of expertly counterfeited wines – his methods included brewing together ancient, but cheap wines, with newer wines to create the right mixture of sediments, color and taste. One customer reportedly spent $2.1 million on 219 bottles of his wine. He now faces up to 40 years in prison on fraud convictions, including one for using his fake wine as collateral to get a $3 million loan.
Laurent Ponsot, a Burgundy winemaker and famed forgery hunter, estimated that 80 per cent of auctioned wines allegedly coming from Burgundy’s most prestigious domains, including his own, are fakes.
Another case involves British wine connoisseurs being tricked into buying bottles of fake Romanee-Conti, known as ‘the most perfect and most expensive of Burgundy wines’. The counterfeiters (An Italian father and son) reportedly managed to make about $1.8 million selling their fake product. Investigators stated the design on the bottles was near perfect. Up to 400 fake bottles were found after a search across Europe, and there are suspicions that there are many more bottles in circulation. This wine could sell for up to £7,000.
Asian markets represent a considerable danger – China, of course, is a big problem; it is currently estimated that 60% of the French wine being sold in China is counterfeit. For instance, several wines on the market are branded with names close to Chateau Lafite, including "Chatelet Lafite". Chatelet is the name of one of the busiest subway stations in Paris. Lafite "is such a generic brand in China that it has widespread appeal as a name and as a status symbol.”, illustrating among other things just how very different branding and marketing can be in China.
For instance, China is currently the number one exporter of Bordeaux with almost 58 million bottles sent out in 2011, representing something along the lines of 334 million euros.
The biggest reason for this interest involves the image of success one projects at owning prestigious bottles. It has little to do with its inherent qualities, such as taste or know-how behind the bottles. It’s important to remember that the Chinese have little to no formal wine culture.
[ “Collectors who care enough to ensure provenance will be fine. Those who continue to be lazy, uninformed or overly trusting will not. And those who continue to believe in secret “magic cellars,” trust vendors who do not give real answers, and accept deals that are “too good to be true,” will carry on being defrauded.”
Maureen Downey, writing for wine-searcher.com ]
Counterfeit wine accounts for some 20 per cent of international sales, according to unofficial wine industry estimates published in the French newspaper, Sud Ouest.
Billionaire businessman Bill Koch, whose cellar includes 43,000 bottles of wine, has become a vocal crusader against fakes after becoming the victim of fraud. In total, he was found to have spent about $5million on between 500 and 600 bottles of fake wine. He stated that one of the main issues affecting the wine industry is that forgeries are dealt with in a quiet, discrete manner – people will opt to swallow their losses and cover up what happened rather than admitting to their own ignorance. This code of silence is very profitable for high end counterfeiters. High end wines are sold to a variety of customers, but experts have noted that many buy them as prestige items, without really knowing much about them. This is what high-end wine counterfeiters are mostly banking on; the pageantry and pomp surrounding, for instance, wine auctions, tends to convince many buyers that what they are paying thousands (sometimes more) to acquire is genuine. A legal representative for certain wealthy buyers has stated that “We can’t even get consumers to use their eyes”, going so far as saying that most won’t even bother scanning the code present on the bottle.
From the information gleaned from various case studies it becomes obvious that the market for fine wine counterfeiting is not only hugely profitable being relatively easy to break into – unless counselled or compelled to do so it seems most of the higher end buyers of wine tend not to control what they are acquiring. Once their purchase is made, they are even less likely to cause a stir if they discover they’ve been swindled. Playing on this pride, stupidity and general arrogance has been very effective thus far – and although it seems that the recent Kurniawan trial has spurred more people to come forward with information about various other scams, odds are people are going to be getting fooled consistently for the foreseeable future.
All of this clearly indicates a huge demand for help against counterfeiters and brand abuse; the market for these things is expanding at an alarming rate, because as protection protocols and techniques get more elaborate, so too do the counterfeiters and their methods. It seems many wineries and other potential interests do have their own systems in-house for ensuring their products are authentic, but not necessarily anything in place for online fraud.
The biggest advantage that NetNames could offer potential clients in the wine business is brand protection; logo recognition and seeking out potentially harmful websites. Considering the new demand for online apps and other methods of identifying products, this would also be an interesting area to focus on. As ever, locking on to Chinese markets would be paramount, as well as other online marketplaces such as Ebay. Taobao, for instance, offers a selection of wines, most of which seem highly suspect. (Including selling bottles of Chateau Lafite Rothschild or Chateauneuf du Pape in bulk prices on Taobao, and counterfeit labels of Mouton Rothschild on eBay). Logo recognition might be helpful in scoping out illegal auction sites and potential phishing attempts.
Written by Jean Leclercq.