The Case of the Counterfeit Krug Champagne

LVMH has settled a legal fight with auctioneer Acker Merrall & Condit over a bottle of 1947 Krug. What does it mean for wine collectors?
The Case of the Counterfeit Krug Champagne
John Kapon has built one of the top auction houses in Hong Kong, where the bottle in question was sold. (Courtesy Acker Asia)
Jul 18, 2017

It was a press release that caught the wine collecting world's attention. On July 6, luxury goods conglomerate LVMH issued a statement announcing that a Hong Kong court had settled a case between it and international auction house Acker Merrall & Condit over a counterfeit bottle of Krug Champagne.

While both parties expressed satisfaction at settling the matter, the spat over the bubbly was a rare public battle between a winery and an auction house. And it may be a sign that wine producers are pushing more forcefully on rare wine merchants when it comes to fighting counterfeits.

“In the final ruling, Acker Merrall & Condit acknowledges and admits that it infringed upon Moët Hennessy registered trademarks, and passed off a product not the genuine Krug Champagne as and for such a Champagne,” read the statement.

The roots of the claim stretch back five years to a blockbuster auction by Acker in Hong Kong. On Sept. 21 and 22, 2012, at the Grand Hyatt Hong Kong, a single bottle of Krug Collection 1947 sold for more than $13,500.

It's not known who bought the bottle. But apparently it came to Krug's attention. Moët Hennessy brought a court action for trademark infringement to the High Court of the Hong Kong Special Administrative Region, after it determined the bottle was counterfeit. (Neither Krug nor LVMH responded to requests for comment).

Wine Spectator has learned that the suspect bottle was from the cellar of one of the world's most famous Champagne collectors. The lot was part of a Champagne collection consigned by Robert Rosania, a real-estate mogul. Acker issued a press release after the sale that touted the 1947 Krug. "The legendary Champagne Collection of Robert Rosania generated immense interest from worldwide collectors and realized nearly $1 million in total," stated the release.

Rosania was one of the “Twelve Angry Men,” a group of high-flying wine collectors known for extravagant tasting dinners together. Acker president and CEO John Kapon was part of the group, frequently blogging about the rare collectible wines they tasted. Also connected to the group was Rudy Kurniawan, the infamous wine counterfeiter who is now serving time in federal prison.

Rosania could not be reached for comment. But in a 2007 interview with Wine Spectator, part of a collecting roundtable that included Kapon, he remarked that counterfeits were a threat and working with reputable merchants was crucial. "This auction season is the safest time to buy the oldest and rarest," he said. "Because every auction house is all over it."

New Rules

After LVMH released its statement, Acker Merrall & Condit (Asia) responded with its own, stating that it is “pleased to have amicably settled” the case. But the auction house takes issue with the accusatory wording of LVMH. "Contrary to the insinuation of MHCS's press release, there was no trial and, as such, the court never ruled against Acker on any disputed issues of fact.”

In an email to Wine Spectator, Kapon noted, “Although Acker (Asia) and its affiliated entities have sold tens of thousands of bottles of Krug Champagne, it bears emphasizing again that this case involved what was determined to be a single counterfeit bottle.”

The court settlement has garnered interest in the wine community due to the high-profile nature of the players involved, and because it represents a shift in the way counterfeits—once a taboo topic—are being handled in the industry.

Typically, luxury goods companies avoid discussing fraud because the mere affiliation, even a combative one, tarnishes the brand’s perceived ability to project quality and exclusivity. Wineries typically contacted auction houses and merchants quietly, asking for suspect bottles to be withdrawn. A rare exception was Burgundy's Laurent Ponsot, who vocally called attention to fake bottles from his family domaine that had been consigned to a 2008 Acker auction in New York.

Since Kurniawan's conviction, auction houses have stressed that they are investigating provenance and authenticating bottles more thoroughly. Whether that's true is a matter of debate. But wineries are also becoming more vocal about protecting their brands.

As announced by LVMH, the court settlement details that Acker Merrall & Condit will conduct “appropriate authentication procedures” moving forward to ensure more stringent verification measures when handling all Moët Hennessy Champagne.

In the email, Kapon said, “To my knowledge, Acker was the first wine auction business in the world to retain third-party inspectors to both inspect and authenticate many of the wines we sell before they ever hit the auction block.” He calls the process “groundbreaking.”

“The bottom line is that, in my opinion, our inspection processes and customer service are the best and most robust in the industry. And our wide international client base apparently agrees, which is why, year after year, Acker remains atop the wine auction world.”

In the future, more wine and luxury goods producers may become vocal as they work to protect their images with consumers. “I think you’re going to see more lawsuits coming against vendors," said Maureen Downey, who founded wine management company Chai Consulting and is regarded as a top authority on counterfeit wines. "You're going to see that people recognize the only way to start chipping away at the problem that is counterfeit wine is one spoonful of the mountain at a time."

“Every time there’s a court case that comes against one of these fraudsters and it’s successful, people will recognize ‘This vendor is selling bad wine, and he’s not even apologetic about it.’" Downey says. "Hopefully that’s going to start affecting vendors’ businesses, and then vendors will be forced to have better business practices.”

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