Wine: finding a great year - for the fakes

Wine counterfeiting, boosted by Asia's growing appetite for high quality labels, is posing a growing threat to producers

PUBLISHED : Monday, 09 December, 2013, 8:37pm
UPDATED : Tuesday, 10 December, 2013, 4:31am

An FBI agent recently showed Arnaud de Laforcade a file with several labels supposedly from 1947 bottles of Chateau Cheval Blanc, one of France's finest wines. To the CEO of the Saint-Emilion vineyard, the tags were clearly fakes — too new looking and on the wrong kind of paper.

But customers may be more easily duped.

Regardless of his skill, the counterfeiter had ambition: 1947 is widely considered an exceptionally good year, and Cheval Blanc's production that year has been called the greatest Bordeaux ever.

People want to find ways to manipulate [wine currency] and make money

The current average price paid for a bottle at auction is about US$11,500, according to which tracks auctions and helps consumers spot fakes.

Wines have probably been counterfeited since its production began. In the 18th century, King Louis XV ordered the makers of Cotes du Rhone to brand their barrels with "CDR" before export to prevent fraud.

But counterfeiting is getting more sophisticated and ambitious, particularly as bottle prices rise because of huge demand in new markets, mainly in Asia.

After decades of silence, producers across the US$217- billion industry are finally beginning to talk about the problem and ways to combat it.

The astronomical prices paid for fine wine these days makes the bottles "more than just a luxury item," says Spiros Malandrakis, senior analyst of the alcoholic drinks market at Euromonitor, a research firm.

"They become a currency in themselves. And as with every currency, at some point, people want to find ways to manipulate that and make more money," he said.

Experts say it's impossible to know the size of the counterfeit market, partly because many sales happen privately and because it is woven into a legal market, unlike, say, cocaine trafficking. Many counterfeits likely go unreported as the victims are embarrassed - and chagrined to lose their investment. Industry insiders, meanwhile, have long ignored the problem collectively as producers have been afraid of scaring customers.

Many experts agree on one point: the quantity of rare bottles from illustrious vineyards being auctioned is just too high to not include fakes.

"I think it's pretty obvious to everybody that there is a relatively large amount of counterfeit wines from these top wineries that is on the market," says Leonardo LoCascio, founder of Winebow, a leading US importer of wine.

Maureen Downey, an expert wine appraiser and authenticator who founded Chai Consulting in San Francisco in the United States, says it is important not to overestimate the problem.

She says counterfeits are probably a small proportion of the global wine trade, but many producers think that recent publicity on the problem means it's been solved.

Not so. In fact, fakes will probably get more sophisticated and harder to track and estimate.

China's case is a good illustration of the evolution of counterfeiting. Initially, criminals took advantage of the country's twin weaknesses: consumers who were new to wine, and the fact they had the money to buy it for show.

That led to a flagrant production of fakes, whose labels simply piled on the names of as many famous vineyards and locales as possible.

But in the past two years, as more Chinese became connoisseurs, there has been an explosion in Asia of more refined counterfeits, says Mark Solomon, who co-founded

Experts fear this problem will continue to grow and won't be confined to Asia, as technology makes it possible to make better fakes and steadily rising auction prices make it worth the while.

"It's kind of an arms race" between the increasing sophistication of the methods used to authenticate bottles and the increasing sophistication of counterfeiters, says Solomon.

On the front lines of that race is Bernard Medina, who is the director of a lab run by the French Finance Ministry in Bordeaux devoted to sniffing out fake wine.

He recently displayed for visiting journalists about 15 bottles with labels running the gamut from the silly to the serious. Some were outrageous amalgamations, like the bottle that had "Luxembourg" on the label and "produit de France" below it.

Others were trying to give consumers just a soupcon of glamour: Chatelet Cheval Blanc, another attempt to copy the illustrious Chateau Cheval Blanc.

Most of the bottles were intercepted in China by French customs or fraud agents.

But Medina also sometimes receives bottles from chateaux in the surrounding area, which is home to many of the world's best wines. These are suspected fakes, but so well done that even the owners aren't quite sure if they might be real.

Medina's lab runs a series of tests on bottles that come their way: measuring the isotopes of certain elements can determine which country a wine comes from, measuring the trace radioactivity in a bottle can broadly determine its age.

Wines that claim to have been bottled before the invention of the atom bomb, for instance, should have no cesium-137.

By contrast, bottles from the 1960s, when nuclear tests happened almost weekly, show a noticeable spike in cesium.

The lab also makes its own wines from grapes collected about every 50 kilometres across Western France. Each of the wines then serves as a reference point for a given year and micro-region. None of the tests is definitive, but, taken together, they can generally sniff out the fakes.

Medina warns, however, that over the past year he has been seeing fewer of the gross counterfeits and expects criminals are focusing on harder-to-spot, more lucrative fakes.

For instance, counterfeiters buy up old, empty bottles from the best vineyards, so the wine would pass a test that sampled the bottle's glass or inspected the label. A recent search on eBay showed several old, empty bottles were for sale, including a 1958 Chateau Lafite Rothschild, a 1928 Chateau Margaux and a 1971 Romanee Conti - all of which are some of the most counterfeited wines.

Several wineries are laser- engraving their bottles with unique serial numbers. Others are experimenting with hologrammed or bar-coded stickers placed half on the bottle, half on the capsule to serve as ID tags and which shred if removed.

The Bordeaux winegrowers' professional association has created an app called Smart Bordeaux. Point your cell phone camera at a wine bottle's label and the app will give you information about the wine and contact details for the winery.

Hindering the industry's ability to shake out the forgeries is its own secretiveness. It is a discrete business, conducted quietly among relatively few people who know one another. When a bad apple worms its way into that circle, many, it seems, would rather swallow their losses than rat out their "friends" and admit their own ignorance.

Bill Koch, the billionaire businessman whose cellar includes 43,000 bottles of wine, says he has upset that order by becoming a vocal crusader against fakes. He started collecting wine about 40 years ago and has bought some of the most sought-after wines in the world, including bottles that purported to be part of Thomas Jefferson's private collection.

Those were the first bottles Koch discovered were fake, but the experience led him to hire experts to sniff out the other forgeries. They have found 500 to 600 counterfeit bottles, for which he paid between US$4 million and US$5 million — and the experts aren't yet finished.