Experts estimate that 20% of the wine consumed worldwide is counterfeit. When a wine label can make the difference between a $5 and a $5000 bottle, encrypted microchips can ensure that consumers are getting exactly what they paid for.
High Levels of Counterfeiting
The counterfeit market is largest in China. An anti-counterfeit lawyer estimated approximately 70% of the “imported” wine in China was fake. By comparing production in France and retail sales in China, enologist Frankie Zhao similarly determined that 70% of Château Lafite Rothschild bottles sold in China are counterfeit.
Difficulty Identifying Counterfeits
A common counterfeit technique is to buy up old, empty bottles from the best vineyards, so the wine would pass a test that sampled the bottle's glass or inspected the label. A recent search on eBay showed old, empty bottles were for sale, including a 1958 Château Lafite Rothschild, a 1928 Chateau Margaux and a 1971 Romanee Conti - all of which are some of the most counterfeited wines. Counterfeiters also go through restaurants’ garbage to find used bottles.
Uncertainty Erodes Faith
Such a high percentage of fakes circulating on the market, combined with the difficulty of distinguishing between real and fake bottles, causes many consumers to falter and lose confidence in purchasing the brand.
Loss in Sales
The loss of revenue associated with counterfeit Italian wines is approximately 2 billion euros ($2.7 billion) per year as of 2015.
Enforcement through the legal system has little impact
In 2012, a federal jury convicted Rudy Kurniawan, a prominent wine collector, of fraud for selling counterfeit wines. When agents searched his house, they found inexpensive Napa wines with notes indicating they would be passed off as older vintages of Bordeaux, corks, stamps, labels, and other tools involved in counterfeiting wine. Later investigations indicated that Kurniawan was purchasing inexpensive, though old, Burgundy wines and re-labeling them with prestigious producer names and vintages. He is currently serving a 10-year sentence.
While this punishment sends a strong message to localized counterfeiters, it has little impact outside the United Stats and likely will not deter the massive counterfeit markets operating overseas. Additionally, combing the world to root out every fake manufacturer and distributor would be a neverending process.