Aussie Wineries Struggle With Rampant Counterfeiting In China

Some Analysts Estimate That 70% Of Lafite In China Is Counterfeit As is the case with virtually every product in the China luxury market that can be copied, wine is a common target for opportunistic counterfeiters who smell easy money from uneducated consumers. Although wine counterfeiting is by no means a new phenomenon in China, with interest in wine among the country's growing middle class growing by the year and mainland Chinese collectors dominating the wine auction market in Hong Kong, counterfeiters have capitalized in a big way on the Chinese obsession with certain wines. The most obvious example of this is the rampant trade in knockoff bottles of 1982 Chateau Lafite, a wine that gained almost mythical status among aspiring wine aficionados in China after a character in the popular 2006 Hong Kong gangster film "Exiled" remarked, "Anything less than Chateau Lafite ’82 is garbage!" Since then, demand for this particular vintage has become so widespread (and resultant counterfeiting has become so intense) that China wine industry expert Jim Boyce told Jing Daily earlier this year, "people joke that you can find more 1982 Lafite in Hong Kong than was ever produced." This sentiment was recently echoed by analyst Andy Xie, who -- in his excellent examination of the Carruades de Lafite bubble currently developing in China -- that experts now estimate that around 70% of the Chateau Lafite consumed in China now is counterfeit. However, it's not just 1982 Chateau Lafite that's the target of wine piracy. This week, counterfeit bottles of Australian wines were found to be rife throughout China, even being presented as quality wines in shops and trade fairs. According to the Sydney Morning Herald, many in the Australian wine industry are concerned that the appearance of fake wines from smaller wineries indicates that the problem is even worse than previously thought, and that increasing piracy threatens Australia's $143 million (US$128 million) wine trade in China: [I]t's not just big companies being targeted. One small Australian wine producer from the southern Flinders Ranges claims he has been the victim of Chinese counterfeiters. Emanuel Skorpos of Flinders Run travelled to China earlier this month following reports that one of his wines had been copied. He visited a wine shop in Shenzhen where he bought two bottles of his Kieras Bin 05 2008 merlot. The wines will now be analysed in Australia. When quizzed, he said, the shopkeeper told him he could also supply other wines under the brand and in greater quantities. Mr Skorpos fears the racket has already affected sales of his wines as well as other producers and threatens to tarnish the image of Australian wine in a country that is now one of Australia's major export wine markets. ''It's bigger than my issue,'' he said. ''It's about Australia's export wine market. The Australian government needs to do something.'' However, not everyone is convinced that the appearance of counterfeit Australian wines in China is cause for alarm: "Brand pirating is not a huge threat to our industry because, apart from Penfolds, Australian brands don't yet have levels of awareness, or aren't in the price bracket to make them attractive pirate brand candidates. There are isolated cases - but it's not our biggest threat,'' [Matt Bahen, deputy general manager of Australian-owned wine distributor, The Wine Republic, in north China,] said. ''Our biggest threat is cheapening 'brand Australia' with random branding in the hope of dumping more containers in China. If we start off cheap and treat Chinese consumers as fools then it's going to bite us.'' Tweet

Aussie Wineries Struggle With Rampant Counterfeiting In China

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Published August 23, 2010

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Aussie Wineries Struggle With Rampant Counterfeiting In China