I first heard of the concept of wine fraud through a podcast I occasionally listen to, called "Stuff You Should Know." The episode chronicles the origins, and some of the most notorious cases of wine fraud in US history. For instance, the hosts mention that Bill Koch, billionaire businessman, is perhaps the most famous victim of wine fraud. According to the podcast, Koch brought in wine experts and showed them 40,000 wine bottles from his cellar, hoping for a validation of the quality of his purchases. However, the experts' analysis yielded a nearly 33% fake wine rate. The podcast hosts claim that this rate--nearly one in three--is about the average you would expect for a fervent vintage wine buyer. In other words, for a $4 million cellar, $1-1.5 million will be fake. In terms of the fraud methodology, one fairly straightforward example is that super high echelon wine fraudsters would take an old bottle, add their own wine, and adjust the label to change the year to a more popular vintage that commands a higher market value.
With this context in mind, I wondered what solutions were being developed to meet what appeared to be a clear market need for validation and security of high-value wine purchases. One new company, Cellr, is producing plastic caps for wine bottles with both NFC and RFID chips in them which contain a unique ‘digital birth certificate’ for each bottle of wine they produce. Using these chips, buyers will be able to instantly verify the authenticity of their purchase. The company plans to launch to market at a price of three to six cents per cap.
https://www.dailymail.co.uk/sciencetech/article-8100971/New-smart-bottle-caps-detect-counterfeit-wine-giving-bottles-digital-birth-certificate.html
If you haven't yet seen Sour Grapes, it's a great documentary about wine fraud. In particular it covers some known fraud that the Koch brothers have dealt with.
ReplyDeleteOne key question that is posed in the documentary goes back into the authenticity question we've brought up in class. If someone is able to blend wine to the point that it fools even the most experienced somms, how does that impact our view of the product? If the experience of enjoying the output isn't tarnished, does it inherently devalue the wine? Obviously the fraud aspect of mislabeling and intentionally capitalizing on the brand equity of the wine being copied is illegal and should remain so. But does the brand equity really justify such an upcharge, especially if someone can blend other wines in a way that even the most discerning pallets can't differentiate?
Just some thoughts - I'm not sure where I stand on this question.
Thanks for this post, Adesh. I had no idea that the "fake rate" (and the damage to collectors' bottom line) was so high! I'm glad that there are companies like Cellr, trying to tackle this issue.
ReplyDeleteOn the other hand, I think data-enabling packaging is only as good as the database that data is stored in and the points at which that data is verified. I am hopeful about the role technologies like blockchain have in fraud prevention within the wine industry. There's a company called Chainvine that not only works on IoT technology (similar to Cellr) but is also trying to build out the underlying infrastructure that would help store and track data on the authenticity of wine, and allow users everywhere to verify its validity. I think the next step is for a company (perhaps existing wine apps?) to build a feature that would allow everyday drinkers and collectors to verify what they drink.