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COUNTERFEIT WINE AND THE ROLE OF CHINA

John Tilson • 7/18/12        Print This Post Print This PostComment Bookmark and Share


If you are a buyer or drinker of old or expensive wine or even if you are just curious about some of the things going on in China, consider this recent article from an Australian newspaper (remember Australia is in close proximity to China and is involved in a lot of trade with them both import and export). This is a fascinating (and scary) read!

 

“FAKES HIT THE AUSTRALIAN WINE MARKET

Source: The West Australian

Ray Jordan, Wine Editor

June 11, 2012

A ship glides effortlessly out from mainland China into international waters under the cloak of night. On board are containers of wine. Who knows what is in the bottles. The shape might be familiar but the label is obscure – let’s call it China Joe’s Classic Red.

Further out another ship waits to rendezvous. On board are labels and a labelling line. In the hours of darkness China Joe’s Classic Red becomes Chateau Lafite Rothschild or Chateau Latour or maybe even an Australian classic, destined for unsuspecting Chinese wine buyers or the auction houses of Hong Kong.

It is part of the increasing trade in fake wines that is causing serious concern among all the world’s producers of premium wines.

It works like this. An original genuine bottle – let’s call it Chateau Lafite Rothschild – is purchased and within a day is copied in every detail from the bottle shape and weight, identifying codes as far as they can be, labels and corks. It takes just 24 hours and is almost impossible to tell from the original without special equipment.

The fake wine, which can be anything, is then bottled into the copied bottles and a simple stick-on label that can be easily peeled off – China’s Joe’s Classic Red – is applied. That is the wine which passes through customs destined for the Chinese market.

But after the night-time rendezvous at sea, China Joe’s Classic Red becomes Chateau Lafite Rothschild bound for some other port and market. Little wonder there is more Lafite ’82 in China than was produced in France.

It is just one aspect of the increasing problem of wine counterfeiting in China, causing major headaches for the world’s wine producers seeking to grow in the world’s fastest growing wine market.

China – the king of the fakes and the knock-offs – has turned increasingly to wine as more Chinese begin to discover the finer pleasures of the grape. A bottle of Lafite or Latour now carries similar status as a Gucci handbag or Cartier watch once did.

In Hong Kong, where thanks to the removal of import tariffs, some of the world’s biggest auction houses have a significant presence, more time is probably spent confirming the authenticity of wines than in gathering them in the first place. Thankfully most is identified and culled before sale.

At a wine fair in Hong Kong last year, a Perth-based wine marketer who did not want to be named said he was openly asked if he had any wines he wanted copied.

At a wine fair I attended recently in Guangzhou, I thought nothing of wine buyers asking the WA winery owners to sign their bottle. But this is not just a memento bottle being collected. It is to guarantee the authenticity of wine. Each different wine in the portfolios was similarly signed.

At the same fair a number of wines were on display with labels clearly designed to look something like the real thing in Australia. For instance from a distance a striking bottle of red wine looked almost identical to a Penfolds wine. It was only on closer examination that the name was Burstforth and when quizzed that it looked remarkably like Penfolds, the representative simply responded with a little smirk and a shrug of the shoulders.

Other bottles of supposed Australian and French wine had such pristine labels that you had to question their authenticity. Some of the more expensive wines were not available for tasting – simply to look at and buy. These included Chateau Mouton Rothschild and Penfolds Bin 707.

There are well-documented instances of wines called Benfolds, La Tour or Laffitte. The spelling approximations are clearly designed to confuse Chinese. At wine fairs some merchants openly exhibited counterfeit wine bottles, some of which are very poor imitations.

Supermarkets and shops, where most Chinese people go to buy their wine due to a lack of specialist wine cellars, are also full of fakes. Most are hard to distinguish so are unlikely to go beyond local areas, however some are very good and need a trained eye or special equipment to identify them as counterfeit.

In most cases counterfeiting is confined to the expensive wines such as First Growth Bordeaux and iconic Australian wines such as Penfolds Grange. There was a famous case some years ago when auction house Langton’s discovered fake 1990 Grange, one of the greatest of vintages.

Penfolds started using laser etching some years ago but were more guarded in other practices they use. These have included special printing on the labels and indicators on the corks. Most consumers aren’t aware of them.

But even the humble Jacobs Creek has been faked with dodgy bottles turning up in London.

Henschke, whose famous Hill of Grace is almost certainly a target for counterfeiting if it hasn’t been already, has introduced a number of practices to protect the integrity of its flagship wine. These include DNA embedded labels, where the DNA of specific grape vines is implanted into the label, laser etching on the bottle and individual bottle numbering. Hardy’s also use the DNA technology in the labels of their flagship Eileen Hardy wines.

In addition, some companies are using radio carbon dating to test authenticity and atomic spectrometry which analyses trace elements passed into the grape from the soil.

There have been cases where the labels of famous old wines have been carefully removed and placed on inferior vintages. Even having the original bottles is useful for counterfeiters wanting to fill them with inferior wines. There is a massive market for used bottles of famous wines that are refilled with junk. Empty bottles of 1982 Latour can fetch more than A$1000. The bottles are filled, recorked and offered at a discount to the real thing.

For the new rich of China, price is not really an issue and neither is it for government officials who don’t mind paying large amounts for wine and other luxury goods with government money.

In many cases they are quite happy to buy wine knowing it is probably fake but in the knowledge that most people won’t know the difference and it is good for image and prestige to be serving it at important functions.

But China is changing. Current consumption is around the litre per capita, putting it well down the list of global wine consumers. But it is changing fast and within a couple of years China will be the sixth biggest consumer of wine.

Protecting the integrity of wine in this growing market will be increasingly important, especially for Australian producers seeking to capture more of the premium wine market as Chinese begin to understand and appreciate the quality of the wines.”

So for those folks who have dismissed wine fraud as something of little importance over the years (remember the Underground was on this before anyone click here), keep this in mind: Fraudulent wine is coming your way in increasing numbers. Forewarned is forearmed. Caveat emptor!
 

 
In Vino Veritas,Sig

John Tilson

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6 comments for “COUNTERFEIT WINE AND THE ROLE OF CHINA”

  1. Thanks for posting. Chinese buyers have been credited for supporting the trophy wine market almost completely on their own. As prices have crashed domestically for would-be super collectibles the long-standing pedigreed labels from Bordeaux have sustained. Recent personal experiences include these two. While attending a recent acupuncture professional even in Monterey Park (this is LA) at a dim sum house I wandered over to the bar in search of a glass of red wine. I was offered something from Costco but I noticed the lineup of first growth Bordeaux on the glass shelf above the bar. Vintages were in the 2000s. Pricing was irrelevant as these bottles are there for show and the very special customer. Second, a close friend recently sold his collection of 19 Saxum bottles from 2004-2007 which included the 2007 James Berry 100 point bottle. The big rep Parkerized reds went for $425 each. The buyer was a Chinese broker with mainland China customers. Now my pal wonders if the bottles will be sold or knocked off.

    Posted by Steve Stumpf | July 22, 2012, 11:44 am
  2. Thanks Steve,
    The Chinese are the new 800 pound gorilla in the room. And, make no mistake they will break a lot of china! I would not trust any wine that has any remote connection to China. I have always liked the fact that most Chinese restaurants have either no wine or a very minimal selection that has allowed me to take my own wine. I now have even more incentive to take in wine.
    My feeling is that almost anything sold to an unknown buyer may likely wind up in China and be knocked off. As my article states, there is every likelihood that a lot of it will find its way out of China in its new form if there is a market. So if people are foolish enough to buy it, that’s there decision and their money. I want no part of it. But, sending big fruit bombs to China? Well, maybe that is another thing!
    In Vino Veritas,
    John

    Posted by John Tilson | July 23, 2012, 12:27 pm
  3. Thanks for posting this John. Really scary and just what I figured would eventually happen with industrial level reproduction. This should make a lot of people who argue that you’re only safe buying newer vintages sit up and take notice.

    Posted by Don Cornwell | July 24, 2012, 2:06 am
  4. Thanks Don.
    So true. Now there is no safe place to buy any wine of value unless you know the provenance. So in that regard wine is like art. And most people cannot tell the difference. So if you don’t care go for it. Otherwise, you had better do your homework if you expect to be buying the real thing!
    In Vino Veritas,
    John

    Posted by John Tilson | July 24, 2012, 10:07 am
  5. Hello,just wanted to tell you,I enjoyed this post. It was inspiring. Keep on posting!

    Posted by monster beats | June 14, 2013, 2:09 am
  6. Thanks. Pass the Underground on to your friends. We have lots of things in the fire!
    In Vino Veritas,
    John

    Posted by John Tilson | June 14, 2013, 3:03 pm

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