China’s Fake Ice Wine Epidemic

Winemakers across the globe are betting that China is the market of the future. The growth in wine consumption and importation there is incredibly rapid. But like any new frontier, the Chinese wine market is a little wild and largely uncharted. One market segment in particular shows the potential problems—ice wine. Canadian winemakers are crying foul over large amounts of counterfeit Canadian ice wine for sale on Chinese store shelves. One importer estimates that 80 percent of ice wine sold there is fake.

Canadian ice wine (and German eiswein) is a sweet wine made by picking grapes when they are frozen, which concentrates the sugars. The Canadian variety, which is more plentiful, has grown very popular in China over the past decade. “It’s a prestigious gift,” said Randy Dufour, export director of Inniskillin Wines, in the Niagara-on-the-Lake VQA. “Gift-giving is such an important part of Chinese culture. If they give a bottle, there is an understanding of the importance and the value of this wine.”

Marcus Stumm, executive chairman of the Hong Kong and Guangzhou-based importer SeaverCronberg, has five Canadian and German ice wine producers in his portfolio. “If I buy an ice wine from Canada and it costs 1200 Renminbi [US$182], the person I give the gift to can go on the internet or to the retail shop and they’d see, wow, 1200 RMB, and that gives me a lot of face,” he said. “And this is something the retailers know, the wholesalers know, the importers know. So they put the price extremely high.”

Jansin Ozkur, vice president of marketing at Konzelmann Estate Winery, said, “When tour buses come here, the Chinese don’t even look at anything else. They just run to our ice wine room. They grab the bottles off the shelves and buy it here for $65,” because in China, the same top-tier Canadian ice wines retail closer to $200.

A confluence of high value, little regulation and consumer ignorance has created the perfect conditions for ice wine counterfeiters. “There is no standard approved here in China—Pradikatswein? VQA [The Canadian quality wine appellation system]? Nobody cares about them here, nobody knows. The market is totally immature, not educated,” said Stumm.

Dufour, who visits China two or three times a year, estimates that between a third to half of the ice wine he sees on retail shelves is fake. Stumm, who regularly scouts wine shops around the country, collecting data so he can work with government authorities to curtail the problem, says it’s “at least 80 percent,” an assessment he considers conservative.

There are a number of ways to make fake ice wine. Some on Chinese store shelves is simply water, sugar and honey in a bottle. Slightly more sophisticated examples are made from white table wine with sugar added, while others are legitimate late-harvest wines—grapes are picked late, but not frozen, and the wine is cheaper in Canada than ice wine. To ape red ice wines, red table wine is simply reduced, to increase viscosity, and sweetened.

Some fakes suggest that a few German and Canadian producers could be complicit. Tom Pennachetti, VP of sales and marketing at Cave Spring Cellars, frequently takes calls from Chinese importers asking for bulk, unbottled, ice wine. “They’ve got a lot of chutzpah to ask me for bulk ice wine,” he said, and he refuses to sell. Other vintners, however, facing a difficult ice wine market elsewhere around the globe, sell bulk wine and turn a blind eye to what happens to their wine once it reaches China.

“Everyone who is selling in bulk to China has to understand [the buyer] will not bottle it pure,” said Stumm. “They mix it with other things. Then they have a product of Canada, because there’s Canadian ice wine in it. Even when the government here asks, they say, ‘We have the invoice and customs declarations. We are importing Canadian ice wine. We’re just bottling it here.’ That makes it difficult for the government to do something about it.”

While many forgers simply cut bulk ice wine with water and sugar, Stumm foresees a potential health catastrophe in the making if some unscrupulous individual adds potentially hazardous chemicals.

So far, the ice wine boom in China has made it difficult for wineries to determine how much, if any, damage is being done to their sales. Dufour believes the reputation of the wine is most at risk. “That’s our biggest concern: that somebody will buy what they think is an authentic ice wine, be disappointed with what they’re buying—and that’s a lot of money to be spending in China—and be completely turned off. They’re not going to do it again.”

For producers less established in China, the proliferation of fakes has been a ball and chain already, as they try to establish a foothold in the lucrative market. Most fakes are not forgeries of existing labels, but made-up brands, indistinguishable to consumers from names like Konzelmann, which only began exporting icewine to China a year ago. Cave Spring is also a new player there. “If you’re starting out and there’s these cheap imitation products undercutting you and there’s no understanding of the guarantee of authenticity, then it does set you back,” said Pennachetti. “You’re charging a higher price than these fake wines, and that’s certainly an impediment.”

While Stumm believes cheap fakes will always plague China, he thinks education and regulation can eventually protect the high-end ice wine market from knockoffs. He is working with governmental trade agencies, both Chinese and Canadian, to develop the sort of rigorous standards China uses for wines from Bordeaux and Champagne. It could be a long slog. “Dealing with Chinese government takes time. It is a perpetual and sometimes painful process,” he said. The Canadian government has higher priorities as well. Yet he believes wheels are in motion, that Chinese officials do not want a public health disaster.

On the education side, both Stumm and Dufour work with retailers and high-end customers, explaining VQA conventions and organizing tastings. Some recent experiences have been encouraging, like a conversation with executives at a large corporate firm. “They are really afraid if one of their VIP clients realizes they were given a fake wine. They made it very clear they would sue my company,” said Stumm. “Wine business in China on the VIP level becomes a question of reputation. The more educated people will be, the higher the requirements by the clients for wine selection, quality control, quality shipment.”

“In the moment there’s a chance to do something about it,” said Stumm. “[If we] just sleep, when we wake up it will be too late.”

Possible signs of a counterfeit icewine:

1. By using the term “Ice Wine” instead of the VQA-regulated “Icewine,” fraudsters can skirt VQA rules.
2. There is no VQA label.
3. No vintage is indicated, which defies VQA requirements.
4. The grape variety is not listed, also against VQA rules.
5. The wine is not attributed to a particular producer.
6. The wine is lighter in color and less viscous than real icewine.