Wine fraud

How prevalent is wine fraud, when a bottle is sold as something it isn’t? Does it happen with Australian wines as much as it does with French? And how do you avoid being duped? Ben Canaider reports.

In 2006, an Indonesian national, Rudy Kurniawan, was feted in the world’s wine press as possessing the planet’s greatest wine cellar. It featured—amongst other things—a staggering array of the best Burgundy in living memory. Everything was going swimmingly well for Kurniawan as he bought and sold these precious bottles on the international secondary wine market. Right up until it was discovered that, well, he’d been making the wine himself.

That is, he bought cheap, old and often stale bottles of humble Burgundy and poured them into old bottles of, say, Domaine de la Romanée-Conti—the greatest Burgundy of all. Some touch-up re-labelling work, and, via an if-not-gullible but all-too-willing market, hey presto, Kurniawan was reeling in the cash. He got greedy, however, and mis-labelled some bottles of Domaine Ponsot from vintage years in which the wine was not made. In 2012 he was sprung, and got 10 years for fraud from a US court.

The bad news for everyone else, however, is that this is tip of the iceberg stuff. Wine fraud is on the rise all around the world, particularly with wines of highest value—Burgundy and Bordeaux.

And there’s no greater testament to this reality than the appearance of anti wine-fraud compliance companies. One of the biggest, Everledger, is a 2015 start-up company that uses blockchain technology to track valuable items—things like currency, jewellery, art, or wine. Think blockchain tech and think Bitcoin, and you’ll understand the sophistication of the process.

Everledger has developed a tamper-proof digital code that draws on 90 points of information on every new bottle of wine, which it can then track and monitor over that bottle’s life and travel, right down to the day it goes into the recycling bin.

Yes, I know—there’s a fair bit of James Bond/Dr Evil creeping into this now, so that’s why I asked the University of Melbourne’s expert in wine fraud, Lecturer in Wine Technology and Viticulture, Christopher Barnes, to put wine fraud into a more local and practical Australian context.

How prevalent is wine fraud?

“Wine fraud has become a problem that’s linked entirely to the growth in the secondary market for wine, particularly with the almost obsessive growth in interest from the Chinese market. But this is very much at the top end, i.e. French wines worth hundreds if not thousands of dollars a bottle.

“When you are spending hundreds and hundreds of dollars for one bottle of wine, you want to be sure you are getting what you are paying for.”—Christopher Barnes, University of Melbourne

Solutions? How do you stop wine fraud?

“There’s a great deal of work being done with innovative packaging techniques. These include hidden codes and identifiers in the labels as well as embedded in the glass. There are simple things such as tamper-proof seals to much more complex parts of packaging that can record how old the bottle or label is, thus helping to ascertain that the bottle of ’61 Latour is really over 50 years’ old and not just tricked up in someone’s kitchen last month. Much of these techniques are still very nascent, however; but in time they will become the norm for high-quality wine.

Does fraud happen with Australian wines as much as it does with French wines?

“No, because there are more labels in France that command the very high prices, such as Bordeaux Classed Growths and Burgundy, than there is the Grange and Hill of Grace level wines we have here in Australia.

How can a wine buyer and restaurateur avoid wine fraud?

“There are very simple things you can do, such as being aware of the original volumes and quantity of the wines you’re buying, in other words how is it possible that there are today 10 cases of a wine for sale when only 100 were made 20 years ago? That’s a warning sign. Also the price—is it too cheap? If it’s imported, it should have a label identifying who the original importer or agent was. If it’s different from whom you are dealing with, contact the agent (if they are still in business) and ask them about the seller and about the wine’s provenance.

And if you’re buying on the secondary market, deal with the three or four bigger wine auction houses. They have much to lose if it became apparent they sell fakes, so they do their homework very well.

Ultimately, however, it is very much caveat emptor. In the future, the good thing, however, is that emerging provenance technology will guarantee the veracity of the wine in the bottle—and this will flow through to the secondary wine auction market as more and more bottles of high-end wine start using this authenticity technology. And let’s face it: when you are spending hundreds and hundreds of dollars for one bottle of wine, you want to be sure you are getting what you are paying for.”

Rich recycling

I’ll finish this month’s instalment with my own experience of wine fraud—albeit third-hand and, I think, supremely innocent.

About 15 years ago, a man came into a hotel front bar in Adelaide, where I was living at the time. (Adelaide, that is; not the front bar.) It was a quiet afternoon—an oddly wet Monday—and he had a black canvas carry-all bag, holding six empty wine bottles. They were all empty bottles from various old vintages of Grange—Australia’s most celebrated, celebrity red.

The man was offering them to the front bar’s clientele for $50 a bottle. I professed interest and asked him where they’d come from. He was a straightforward businessman in this regard: “Magill Estate’s (Penfold’s Adelaide winery and posh restaurant) recycling bin. They just chuck them out. But it’s Grange. Or at least,
it was…”

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1 Comment

  1. My name is Scott Evers and I, along with 8 other people from around the globe, have been chosen to be trained and mentored by the world’s leading wine fraud expert Maureen Downey. I will soon have the title of TCM Accredited and Licensed Wine Authenticator, the only person to hold this title in Australia. I will also be the only licensed Authenticator in Australia to send wines into Chai Wine Vault Block chain, the first of its kind in the world thanks to a partnership between WineFraud.com and Everledger.

    If I may, I would like to offer my opinion to a few points and quotes made in your article, namely:

    1. Wine Fraud was happening well before the secondary wine market started to flourish and well before the Chinese started purchasing rare and fine wines.
    2. Commercial Wine counterfeits are on the increase, so its not just fine and rare wine being counterfeited nowadays.
    3. Penfolds Grange and Bin 707 are now the most counterfeited wines in China, along with Lafite-Rothschild. So Australian Icon Wines ARE being counterfeited, and at an alarming rate!
    4. Auction Houses in Australia to date do not employ any QUALIFIED Authenticators. Nor do they outsource third party qualified authenticators to authenticate nor advise them on risk management strategies. So I’m sorry but they do NOT ‘do their homework very well’. I’m hoping this will change soon.

    Please feel free to contact me if you would like any advice or clarification.

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