Faking It: How to Commit and Prevent Wine Fraud

     The country’s news outlets are abuzz with the latest wine fraud scandal. Rudy Kurniawan of Arcadia, California, was arrested on March 8 by the Federal Bureau of Investigation in Los Angeles on charges of trying to sell fraudulent wines. According to The New York Times, the wines, if genuine, would have been worth $1.3 million, and included numerous bottles of wines purportedly from various famous estates, such as Romanée-Conti and Domaine Ponsot. Mr. Kurniawan is a well-known wine collector, and is an authority on fraudulent wines.

     The complaint alleges numerous charges, including Wine Fraud – Scheme to Defraud a Finance Company, Wine Fraud – Scheme to Defraud the Finance Company and a New York Auction House, Wine Fraud – Attempt to Sell Encumbered Wines At An International Auction House, and two separate counts of Mail Fraud for attempting to sell counterfeit wines.

     Wine fraud is as old as the industry itself, and is the reason wine laws came into existence in the first place. Ensuring that a consumer knows what product he is getting is the main purpose of many wine laws, and such laws protect not only consumers, but producers who desire to create and maintain reputations for high quality wines.

What Makes a Wine Fraudulent?

     When one goes to purchase a bottle of wine, she usually assumes that the information provided on the outside matches the contents on the inside. While numerous items are purported to be things they are not, it is difficult to discern a fake wine unless it is opened, thereby ruining its value if it were in fact real (at least until recently, see below). While it is alleged that Mr. Kurniawan engaged in counterfeiting bottles by creating fake wine labels using vintage stamps as well as old corks and foil wrappers, there are various ways to create a fraudulent wine.

Label Fraud

     Bottles of wine have numerous distinctive features that can make creating fraudulent wines a laborious process. Winemakers put their individual touch on everything from bottles to labels, but also items that are not readily visible when examining a bottle of wine, such as corks.

     One who wishes to engage in wine fraud may obtain bottles of expensive wine, fill them with less expensive wine, find appropriate corks and seals, and then pass the bottles off as the real McCoy. One may also create counterfeit labels of expensive wines and place them onto bottles of less expensive wine. In either case, the purchaser is not getting what he bargained for.

Grapes

     One may also market and sell grapes as certain types, when in fact they are not. No one is immune to such activities, as even Gallo Wine was the victim of fraud when French producers sold them purportedly 100% Pinot Noir grapes that were actually cheaper Syrah and Merlot grapes.

Blending

     While blending wine is not in and of itself illegal, and blended wines are growing in popularity compared to their single-grape counterparts, some blending practices are in fact fraudulent. Wine laws tend to include regulations on how much of a particular grape must be used in order to state that the wine is from that grape, and also address the issue of mixing grapes or wines from different regions.

     Mixing wine with other substances, such as water, sugar, or milk, also occurs, as well as mixing wines of differing vintages in order to create a more balanced final product. While some in the industry find no problem with such practices, others see it as sullying not only the wine, but also the industry itself.

     Other potentially fraudulent practices include humidification, or “adding water to wine.” This is a technique used by winemakers to make their wines taste better. The water is used to help balance extremely ripe grapes that have higher concentrations of sugars and phenolic compounds, but also has the effect of dropping the alcohol volume, sometimes below certain tax thresholds. 

     Wine fraud could also take the form of one stealing expensive wine and replacing it with cheap wine (leaving the actual owner none the wiser), or trying to collect insurance on lost bottles that never existed in the first place, as this wine educator and sometimes investigator notes.

Preventing Wine Fraud

     Besides the usual ways of dealing with claims of fraud, some wine-specific suggestions and examples have been offered to combat the unique problems of wine fraud.

• There have been suggestions to change the way the rarest wines are sold at auction by revising the auction conditions of sale to address the issue of counterfeiting.
• Websites exist to help the industry fight back against counterfeit wines and offer authentication services, for $249 per opinion (or at a discounted rate if you foresee yourself requiring their services on a regular basis).
• Areas that produce numerous excellent wines, such as Italy, have gone so far as to train Carabinieri officers to become sommeliers so that they are better enabled to tackle wine crimes.
•  Recently, scientists at UC Davis published a study that used non-invasive methods to determine what is inside a bottle of wine by examining the molecular structure of its contents.
• And of course, there’s an app for that.

     For those of us who can’t afford fancy new techniques, websites also give quick tips on how to spot counterfeit bottles. While many will never purchase a bottle worth faking, it is important that the industry and the government take steps to prevent wine fraud in the future, ensuring that consumers know what they are purchasing, and producers are able to protect their product and reputation.