What’s All the Buzz About Counterfeit Wine and Spirits?

In partnership with SafeProof.

Bootlegging alcohol didn’t get left behind in the Prohibition Era. In fact, according to a 2014 report by the World Health Organization, unregulated alcohol makes up 25% of all consumption worldwide. But what are the implications of fake alcohol? Why should everyone from consumers to manufacturers to government entities care? Let’s take a look at the facts.

1. Counterfeit wine and spirits are toxic, sometimes lethal and prevalent in low-income countries.

As with counterfeit medicines, criminals prey on members of low-income regions who can’t afford the price tag of a fine wine or spirit. At the baseline, alcohol is poisonous when consumed in excess, but distillers, vintners and brewers are skilled in determining the right formula that makes it safe for public consumption. The same cannot be said for counterfeiters.

In 2018 alone, dozens of stories hit the newswire reporting on mass deaths in countries like Russia, Indonesia and Malaysia due to illicit alcohol. Even more shocking is that if the victim doesn’t die he or she can become ill which can explain poor health conditions in these communities.

2. Counterfeit wine and spirits ruin brand integrity.

While most of the illicit alcohol trade is happening outside of North America, if you live or frequent any of the other six continents there is definitely cause for concern. The possibility of the negative effects previously mentioned may make you less likely to purchase that bottle of top-shelf liquor due to suspicions that you may not be getting the real thing.

Last November, $14.4 million worth of fake wine was seized in China, but that’s just the tip of the iceberg since the counterfeit wine industry is a multi-billion dollar business. It may not mean much for the average wine consumer, but for avid wine collectors even the slightest fudge in details could create a distrust resulting in the cease in purchase of that brand.

3. Counterfeit and diverted wine and spirits costs the government money.

Did you know that according to IARD's Alcohol in the Shadow Economy report the fiscal loss due to unregulated alcohol in the 18 countries researched totals a whopping $1.8 billion? To be clear not all unregulated alcohol is counterfeit. Alcohol produced at home due to cultural practices is on a small scale and rarely infiltrates the market to impact government funds. However, those who are producing alcohol under the radar with intent to sell are circumventing tax laws that legitimate businesses don’t have the luxury of doing.

Illicit alcohol producers use fake tax stamps, counterfeit holograms or seals to bypass excise and duty taxes to maximize their illegal profits at the expense of the public and brands. Unfortunately, government enforcement has limited resources to pursue this growing trend.

So, what can be done?

Spreading awareness of this growing epidemic is the first step in combatting the consumption of counterfeit wine and spirits. SafeProof raises awareness for adulterated and counterfeit alcohol globally by maintaining the only international tip line for spurious spirits, and working with partners to keep consumers and their drinks safe.

Also, businesses must take appropriate action to protect their brands, their consumers and their revenues. Like the pharmaceutical industry, complying with government regulations alone isn’t enough to ensure that authentic product isn’t being diverted into the gray market and that consumers aren’t being hoodwinked into buying a counterfeit product.

Attending Vinexpo? We’ll be hosting a complimentary champagne breakfast on March 5th along with our friends at SafeProof to educate attendees on the dangers of counterfeit wine and spirits, as well as how businesses can fight back. Click here for more details!