With bottles of wine auctioned at upwards of £5,000 a case, the fine wine industry is undoubtedly a lucrative one. However, the exclusivity of the fine wine market, the subjective nature of the value of wine and the intangible nature of those factors which influence wines’ value have together made counterfeiting the product extremely easy.
Historically, the idea that a wine was liable to be ‘copied’ was so inconceivable that the majority of producers gave little attention to their branding. As a result, wines were often distributed in a range of different bottles. In the context of the contemporary market, this has made the authentication of aged wines all the more difficult – while high-value bottles may come with an authentication certificate, bogus documents could almost certainly slip through.
Although there had been previous suspicions of fake bottles, the most notorious incident of wine fraud involved Rudy Kurniawan, who, after years building his name among industry leaders as a wine connoisseur, was found to have sold upwards of $550 million worth of fake bottles. Fooling the wine industry’s biggest players, by purchasing and refilling used bottles with his own creations, Kurniawan used the ambiguities surrounding the value of wine to his advantage. Although many of the bottles he sold were seized by the FBI, it is impossible to say for certain whether any of his products still remain on the market.
More recently, the rising popularity of wine among the Asian markets has opened up the industry to a new wave of fraud. The world-renowned ‘Chateau Lafite’ has been particularly targeted, with a number of wines with similar names, including ‘Chatelet Lafite,’ being sold across China.
On a practical level, counterfeit wines provide a clear example of the importance of both establishing and protecting a clear brand image. Whilst other measures are being taken to protect aged wines from imitation, producers of newer wines should invest in strong branding. Once a clear brand image is established, producers will be in a stronger position both to obtain registered rights and claim unregistered rights in their brand, which they can later use to protect their interests from the harmful effects of imitation.