Grapes of graft: healthy demand for rare drops makes wealthy wine collectors easy targets

Discovering rare, valuable wines is akin to chasing unicorns; we love to believe they exist, but they are rarely ever seen in captivity. For some, sought-after collectibles hold an irresistible allure. Possessing something precious that very few people have becomes an intoxicating obsession. That blind belief can make people susceptible to con men. Strong demand for rare wines makes cashed-up collectors easy targets for counterfeiters. Fakes range from bottles of “Lafite” with blatantly misspelled names, to clever counterfeits that are passed off as the genuine thing. China’s wine culture is still in the wonder years, making mainland buyers particularly vulnerable.

Counterfeiting wine is nothing new. In Roman times, deceitful purveyors swindled drinkers by passing off cheap wine as the empire’s famous Falernian, the Sassicaia of its time. More recently, counterfeiters have targeted collectors and investors by releasing fake valuable wines onto the market. Convicted fraudster Rudy Kurniawan sold hundreds of bottles of purportedly rare and expensive wine to collectors between 2004 and 2012, both at auction and in private sales. Kurniawan’s multimillion dollar counterfeiting operation began unravelling in 2007 when several magnums of 1982 Chateau Le Pin he consigned for auction were identified as fakes. Kurniawan was later convicted of fraud for, among other things, making wine in his home laboratory and selling the bottles as Domaine de la Romanee-Conti and its peers. In some cases, he sold the wines inthe genuine wine’s empty bottles stuck with counterfeit labels he had printed himself.

German collector Hardy Rodenstock shot to infamy in 1985 when the gavel dropped at Christie’s in London on one of the most expensive bottles of wine ever sold at auction – a 1784 Yquem for £105,000. The bottle came from a collection called “The Jefferson Bottles”, marked with the initials Th.J for President Thomas Jefferson. Rodenstock claimed to have made the discovery in a hidden Parisian vault. He has since been disgraced and the authenticity of his entire collection brought into question. Rodenstock was never formally convicted, but the Jefferson Bottles are considered the world’s most elaborate and expensive wine fraud.

Counterfeiting is not just a one-percenter’s problem, though. A large number of scams are also perpetrated in the middle and retail markets. In 2011, Australian brand Jacob’s Creek was caught up in a scandal when fake bottles from China, seemingly bearing its label, wound up in English off-licences. The fraud was discovered by a spelling mistake declaring them a “Product of Austrlia”. Such operations appear foolish and brazen, but David Wainwright, director of Wainwright Advisors, says the counterfeiting industry is a tough one to combat. “In general, counterfeiting is one of the largest, most widespread crimes, yet it has the lowest conviction rates.”

Wainwright, an international expert in rare wine and counterfeit wine, recently speaking at Meiburg Wine Media’s SPIT Workshop, told a Hong Kong audience that a lack of legislation and significant costs make it difficult to prove counterfeiting and prosecute offenders. Hong Kong is one jurisdiction that has robust mechanisms in place to protect its reputation as A-plus. “The Hong Kong government pursues wine fraud under copyright infringement. Importers are required to register all labels and vintages and report any fakes and counterfeits to the authorities,” he says.