By Chris Watkins
WITH wine sales booming worldwide, especially here in Asia, it’s probably no surprise to learn that the incidence of fraud and forgery is also on the increase – spectacularly so in some cases.
Stories regularly told of more bottles of top French wines being sold in China than are actually produced in the whole of France are far from apocryphal. With a market full of newly wealthy but largely uneducated consumers, the country is ripe for predators.
Indeed, only recently, police in China discovered 10,000 bottles from legendary winemaker Chateau Lafite Rothschild – including some of the world’s most expensive wines – in a deserted house near Shanghai. If authentic, which is highly unlikely, the wines would be worth up to US$16 million. Although 50,000 bottles are imported from the Chateau Lafite estate each year, why on earth would a fifth of that amount be stored in run-down premises?
It should therefore come as no surprise to learn that an estimated 70% of Chateau Lafite sold in China is fake.
Visitors to the Fuzhou trade show have reported seeing countless fake bottles of Lafite being openly displayed. One was apparently called Shunyi Lafite and sported the blue and yellow banded capsule along with the five-arrow logo of the Rothschilds. Another was named Chateau Shunyi but bore a Lafite lookalike label.
Meanwhile, a good deal of counterfeit wine is heading out of China to unsuspecting drinkers overseas.
Normally sold in the UK for 350-490 baht, these counterfeit bottles of Jacob’s Creek were being hawked around shops and off-licences for less than 100 baht. The wine, thought to have come from China, apparently tasted awful.
Indeed, scammers the world over are constantly thinking up new and more complex ways to fleece buyers and cheat genuine wine producers.
Small vineyards in Europe, for example, are at the mercy of Asian merchants who may buy a small quantity of their good quality and expensive wine, and then work with unscrupulous restaurants to consistently refill empty bottles with Chinese ‘plonk’ and serve it to unsuspecting customers.
Another kind of fraud was uncovered in the UK earlier this year, when a 125 million baht “investment business” run by a brother and sister turned out to be a scam. The pair had persuaded almost 100 investors into handing over money for Australian wines that did not exist. Intriguingly, they also planned to use the money to ship cheap alcohol to China.
But by far and away the biggest scandal to dog the wine industry in years, however, focuses on the astonishingly brazen machinations of Rudy Kurniawan, an Indonesian-Chinese wine merchant >>
and collector who is thought to be behind the largest case of fine-wine fraud in history.
After years of electrifying the wine industry with his audacious buying and selling of vintage Burgundies at auction, Kurniawan almost single-handedly succeeded in driving the rare-wine market to new heights. Trouble was, many of the wines he later tried to offload turned out to be fakes, often presented in genuine bottles that he had bought as empties at the back door of top-notch restaurants.
When his house in Los Angeles was raided, police discovered a counterfeiting factory, with scores of bottles being converted to lookalikes and thousands of fake labels for the most famous wines from Burgundy and Bordeaux. Kurniawan now stands accused of selling millions of dollars’ worth of counterfeit wines and scamming some of the world’s biggest collectors.
As a relatively small player in the international wine business, Thailand remains largely free of scams like these. Yet they are beginning to surface. A visiting oenologist from Europe, for example, was horrified when a bottle of Burgundy he ordered at a well known Bangkok restaurant bore little resemblance to the fine wine he knew well from numerous previous tastings back home.
“It was not only the taste that was wrong but also the price,” said the wine expert. “Although it was over 4,000 baht, it should have been much more expensive, as it is in Europe.”
Suspecting a scam, he removed the empty bottle and is currently checking its authenticity with the winemaker. He admits, however, that he didn’t see the restaurant staff uncork the bottle, so if there is anything untoward, it could be that the contents had been replaced with a lesser wine; the bottle itself might well be genuine.
There are several other possible explanations. One, the restaurant filled a genuine bottle with a cheaper wine. Or two, the restaurant was unwittingly sold a well known brand at a much reduced price by fraudsters who used a counterfeit label on a lookalike bottle and filled it with wine of similar but inferior quality. It’s even suggested that some wineries are prepared to cooperate with fraudsters by putting fake and misleading labels on their bottles.
The European oenologist’s experience is rare, suggests a local wine dealer. “If fraud happens at all in Thailand, it will only happen at the high end of the market,” he says. “By far the majority of wine sold here is genuine because it is not expensive.”
That said, wine importers focusing on the top end of the Thai market do enjoy a good record for ensuring their products are genuine.
So, forgery may still be uncommon in Thailand, but most wine drinkers here would probably disagree with the sentiment that wine sold here is “not expensive.” With some of the highest duties in Asia, up to 300 per cent, even vin ordinaire can be very costly.
Keeping prices at affordable levels is thus a constant battle for wine importers. To avoid those punitive taxes, smuggling wine has become an attractive proposition for some suppliers, while others buy in bulk from foreign negociants who are able to offer rock bottom prices.
“A bottle that costs as little as one Euro can end up on a Bangkok restaurant wine list for as much as 799 baht,” says the local dealer, adding that “everyone involved in the local wine trade knows how to reduce their tax liabilities.”
He also suggests that FTAs (free trade agreements) actually serve to increase the cost of wine in Thailand because of statutory requirements to declare the origins and dates of certain wines. In the past, these could be fudged, reducing taxes and duties.
Another source of concern, and potential unfairness to legitimate importers, is the practice of adding fruit juice to wine, so that the beverage is taxed as fruit juice. “The profit margins are phenomenal,” he reckons.
Back in China, authorities are becoming more serious about wine forgery. Punishment is linked to the value of the goods, and death sentences are known to have been given to forgers of expensive products.
Analysts recommend the website www.truebottle.com to verify the authenticity of wine. Cheers.