- The Underground Wine Letter - http://www.undergroundwineletter.com -

LIGHTNING STRIKES TWICE!

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It happened! After all the controversy about the Spectrum/Vanquish wine auction and possible fraudulent wines, the auction was held as scheduled on the evening of February 8 in London. At the last minute, a significant number of the old Domaine Romanée Conti wines were pulled from the auction. At this point there is a lot of conjecture, but it is not known for certain what prompted the withdrawal of these bottles. However, I believe that it is plausible to assume that the publicity swirling around before the auction about the source of the bottles and the discrepancies in the labels had a lot to do with it.  Also, some other lots were withdrawn after the news of discrepancies was circulated.  These include Comte Georges de Vogue wines which were withdrawn at the specific request of the domaine. Also, the details of what sold, what did not sell, and the prices realized is clouded. Finally, there are unanswered questions about how the sale was conducted. In short, there are a lot of things that are yet to be resolved. So, the auction is now history, but the story seems far from over. Consider the following things that have happened in the last few days following the auction:

1) The Spectrum attorneys have joined in and have sent at least one threatening letter.

2) At least one consignor withdrew wines and does not plan to do more business with the company. This seems likely to spread.

3) An investigation is underway with people now being asked to provide information to the authorities regarding wines in the sale.

4) Further investigation into the background of Spectrum has turned up evidence of prior unsavory business practices.

And, this just seems to be just the beginning. A prolonged investigation and more lawsuits seem to be the likely outcome. No doubt, as the story continues to unveil, the press will be more involved. In fact, one national publication did report on the story, but after the sale. However, it is important to note that story started on the internet well before the sale took place! Don Cornwell first reported the information about the source of the wines for sale and also the label discrepancies he discovered as well as those discovered by Geoffrey Troy, an Underground contributing editor, and others. The Underground posted an article immediately thereafter. As I said earlier, I had only just posted my fraud story a few weeks before (to read that article click here [2]) when the Spectrum/Vanquish controversy became known. This came as no surprise to those of us involved with the Underground as we have known of wine fraud and reported on its existence for some 30 years! The difference this time around was the internet which allowed the story to be spread around the world at lightning speed.

So where does that leave us? Good question and there is no answer. We are likely to continue to be plagued by wine fraud until several things are done. They include the following:

1) Wine sellers, including auction houses, should disclose the provenance of all wines being sold. This is the most important thing to know in buying old wine. As I have said, in real estate it is location, location, and location. In buying old wine, it is provenance, provenance, provenance. (To read my article on this subject click here [3])

 

2) Wine producers should disclose any changes made in the labels, corks, bottles, and capsules over the years. This would enable fraudulent bottles to be identified more readily.

3) More transparency in the entire market for selling old wines is needed. All auction houses should clearly disclose their auction practices. There are many things that are involved here such the use of third party bidders, bids on behalf of the house, the accounting for and implementation of written bids, and full disclosure of the sales results. Also, conditions of sale should be uniformly revised to protect the buyer if fraudulent wine was purchased. This should cause the sellers to do a more diligent job in screening for fraud before offering wine for sale.

4) All producers of premium priced wines that might be subject to counterfeiting should immediately implement procedures to prevent counterfeiting. These include such things as labels with watermarks like bank notes, embossed bottles, seals between the glass and capsule, and a unique code on each bottle that can be matched against a list on the internet to verify the authenticity of the wine.

The campaign against wine fraud has been a long road. And, unfortunately, wine fraud is accelerating. The Spectrum/Vanquish incident is just the latest controversy. In China, wine fraud is out in the open and rampant. It has been reported that prized empty bottles are being purchased at prices above $300 per bottle. Wines are then counterfeited and sold into a secondary market at a discount to the real thing. Therefore, it is reasonable to assume that other higher quality counterfeits are being passed off as the real thing. And, without more diligent screening by sellers and more scrutiny by buyers, it is likely that more and more of these bottles will get into markets outside of China.

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Hopefully, the ongoing investigations will lead to the suppliers of fraudulent wines and to those who might be knowingly making a market in them. Until then it is up to everyone involved with wine to do whatever possible to help control the wine fraud disease. No matter what, the Underground will continue to be a diligent defender of authentic wines and speak out for the elimination of wine fraud. But, it won’t be easy. Is it just a coincidence that shortly after my first article on fraud appeared that the Underground website was hacked? We have been working on this problem and hope to get rid of the viruses within a matter of days. In the meantime, I want everyone to be alerted that there may be a price to pay for our diligence! Thank you for your support and understanding.

In Vino Veritas,Sig

John Tilson