According to a study conducted by the EUIPO (European Union Intellectual Property Right Office), counterfeit spirits and wine cost the European economy € 2.7 billion a year. (1)
Recently, the wine collector market has been growing significantly and this, in turn, increased the demand (and the price) for rare vintages. The practice of counterfeiting has therefore become extremely profitable and fraudsters found different strategies to pursue it in time. One of them is to re-create bottles to look like the authentic version they represent. Another consists in refilling authentic bottles of expensive wines with a cheaper one in substitution.
These practices are the ones that made “the fortune” of Rudy Kurniawan (picture from france24.com), a major player at Burgundy auctions in the early 2000s. Initially, he passed himself off as an extremely wealthy descendant of a rich Indonesian family. He made a name for himself by buying precious lots of French wine, spending millions of dollars and consolidating his reputation as a great expert and collector. After some time, he began to sell his accumulated collection, carefully counterfeited and enlarged, collecting millions of dollars. In one auction at Acker Merrall & Condit in 2006, Kurniawan sold $24.7 million of wine, beating the previous record by $10m. (2) Because of some discrepancies on specific vintages, some doubts raised about the authenticity of the sold wines and an FBI investigation was carried out. This led to the discovery of a fully equipped counterfeiting kit in Kurniawan’s house, composted by materials such as corking tools, labels and empty bottles.
Due to the recent opening of the Russian and Asian markets, a demand for “trophy” wines has been created, messing up with the dynamics of the original market, limited to a restricted number of buyers. Taking advantage of the lack of knowledge and preparation on wine of the new rich, many suppliers of fake wines have transferred their activities from the U.S. to Asia, taking advantage of the fact that, in these countries, controls are looser.
Now that Kurniawan is free again, already having a network of contacts and a skilled background, he could turn his attention to these markets. Additionally, Rudy’s uncle Eddy Tansil, who fled to China after a 17-year sentence for embezzlement of $420 million from Bank Pembangunan Indonesia, could welcome him with some budget to start again his activity.
So, what is the best solution a brand can implement? In this case the platform developed by Authena comes in support. Its technology prevents even the most sophisticated counterfeiting methods such as fraudulent refilling. In fact, thanks to a revolutionary IoT & blockchain secured seal to be applied on each single bottle, Authena is able to inform collectors and wine lovers on the integrity of the products they purchase. The physical-digital product seal can be read by any modern smartphone and contains a unique and encrypted digital passport that grants authenticity and full traceability. Finally, the same anti-counterfeiting solution enables a two-way communication between producers and consumer, offering marketing opportunities to the firsts and reestablishing trust in the lasts.