Who Are They Fooling? (A Lot of Folks)

As much as 20 percent of wine on the global market may be fake. Awareness is on the rise, but will the counterfeiting continue?
Nov 21, 2013

More than five years ago, Burgundy's Laurent Ponsot put the brakes on an Acker Merrall & Condit wine auction of more than 100 dubious "old" bottles of Domaine Ponsot, valued at more than a half-million dollars. I remember my reaction well, like a kid in a classroom relishing in the apprehension of a cheater: "Ooooooohh … Busted!!!"

Not many of us grasped the gravity of the moment: Wine collectors were dusting off the tip of a buried pyramid of counterfeit high-end collectibles and, to this day, we still can't accurately assess its size. The Ponsot debacle introduced us to Rudy Kurniawan, now awaiting trial on federal fraud charges, but those charges didn't come until last year. Back in 2008, collector Bill Koch was already proceeding with lawsuits against major auction houses, but cautionary fairy tales like the so-called Thomas Jefferson Bordeauxs that Koch purchased from German dealer Hardy Rodenstock just seemed like billionaire problems for the gossip pages.

We know a lot more about counterfeit wine today, and the extent of the issue has never been taken more seriously. Earlier this month, the French newspaper Sud Ouest, based in Bordeaux, published a shocking estimate that 20 percent of the wine sold on the international market is fraudulent. It's almost certainly an overestimate, but it's enough to give pause that an organization with its finger on the pulse of fine wine could come up with such a number.

"It’s impossible to quantify how much fake wine is actually out there," said Maureen Downey, an expert in wine authentication and owner of Chai Consulting, which provides services such as appraisals to wine collectors. "There’s no way that that number would be 20 percent."

Sud Ouest's 20 percent estimate isn't just referring to luxury auction wines, of course. Authorities have to contend with three categories of fake wine: The aforementioned "luxury" category of often meticulously forged collectibles; "premium" wine fakes for which existing brands' labels are slightly adulterated, such as China's homage à Penfolds, Benfolds; and fake bulk wine, whereby inexpensive juice is mislabeled with an appellation that will fetch a higher price.

Downey, who is attending the Wine Vision summit in London this week, where wine fraud has been a hot topic of conversation, said she doesn't think counterfeits are actually on the rise. "The only thing that’s rising is consumer awareness," she said. "Since 2008, with the Laurent Ponsot debacle at Acker, we’ve been able to cut down on some of the wholesale dumping of fake wine into the market, but there is still a large number of retailers and brokers who hide behind ignorance and are happily selling forward very fake wines."

"Big-ticket fraud" won't disappear until authorities punish the people who have truly benefited from selling fake wine and supporting counterfeiters, Downey said. "Until some of these people see consequences and the rest of the industry sees consequences, there are going to be a lot more people out there who choose to take advantage."

Counterfeit wine will also persist because it is now truly a global issue, Downey said. "In Asia, there are tons of fake wines … fortunately they’re not as much a problem in the Western market. Those are going to continue to be a big problem, one of the reasons being that, especially in China, they have a culture where counterfeits are accepted. Not only are they accepted—they’re embraced. They almost consider it flattery. You’re dealing with a cultural difference over there, where counterfeits are not seen as being as evil as they are in our world. So I don’t see that going away."

Downey told me that she doesn't buy any wines that have passed through Asia for her clients, no matter how respectable the brokerage offering them. How cautious are you when it comes to buying wine? Do you raise your guard when shopping for wine in a foreign market?

Crime Fraud Legal and Legislative Issues

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