Amid China's Boom, Fake Wines Proliferate

http://www.nytimes.com/2013/06/10/business/global/amid-chinas-boom-fake-wines-proliferate.html

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BEIJING — Bruno Paumard, the cellar master at a vineyard in China, cannot stop laughing while describing a bottle of supposedly French wine a friend gave him two years ago.

It was white wine with a label proclaiming it was from the vineyards of Romanée-Conti; the bottle bore the logo that is on bottles of Château Lafite-Rothschild, declaring its origin as Montpellier in southern France.

Domaine de la Romanée-Conti, better known for highly prized and highly priced vintages from the Burgundy region of France, makes only a tiny amount of white wine, labeled Montrachet. It has nothing to do with the equally prestigious Lafite, which is from the Bordeaux region, and neither brand is produced anywhere near Montpellier.

“It’s the most magnificent example of a hijacked brand of wine I’ve ever seen,” said Mr. Paumard, who works with Chateau Hansen in the Chinese desert region of Inner Mongolia. “It doesn’t get better than that.”

Liquor stores, restaurants and supermarkets in China, the world’s most populous nation and one of the biggest wine consumers, wage a constant battle against fake wines. The number of knockoffs on the market may increase as Beijing investigates wine imports from the European Union, threatening anti-dumping tariffs or import curbs.

China announced the investigation last week after the Union slapped anti-dumping duties on Chinese solar panels.

“More expensive wine is O.K. I just don’t want any fakes,” said Helen Nie, a Beijing housewife sharing a bottle of the Italian house white wine at a restaurant with a friend. “If the cost goes up, I’d still buy wine, though some people wouldn’t — the price makes a difference. But the quality is important; it’s a health question.”

E.U. wine exports to China reached 257.3 million liters, or 67.9 million gallons, in 2012 for a value of nearly $1 billion, more than a tenfold increase since 2006 as rapidly increasing wealth has transformed lives and tastes in the world’s fastest-growing major economy. More than half of the 2012 total, about 139.5 million liters — came from France.

Nobody knows how much of the market is cornered by fakes and copycats, said Jim Boyce, who follows the Chinese wine industry on his blog, Grape Wall of China. “Things that are faked tend to be things that are very popular,” Mr. Boyce said.

And wine, especially expensive wine, is popular in China, sometimes more for bragging rights than taste.

“Those expensive wines are where you see more fakes,” said Maggie Wang, who was sharing the house wine from Sardinia at the Beijing restaurant with Ms. Nie. “But there’s lots of phony wine. Everything’s faked in China,” she said. “For a lot of Chinese consumers, the more expensive it is, the more they’ll buy it. Chinese like things like that — they’ll buy the most expensive house, drive the most expensive car. They don’t want the best, they want the most expensive.”

Given the high margins and the demand, the counterfeiters tend to focus on European fine wines.

The iconic Château Lafite has become the poster child for wine forgery. A bottle of Lafite from 1982, considered one of the greatest vintages of the 20th century, can cost upward of $10,000.

That has led to a thriving industry in Lafite knockoffs in China. Aficionados say there are more cases of wine marketed as 1982 Lafite in China than were actually produced by the chateau during that year.

However, Christophe Salin, president of Domaines Barons de Rothschild, which owns Lafite-Rothschild, says fake Lafite is not the major problem.

“I have never seen a bottle of fake ’82 Lafite,” said Mr. Salin, who has been traveling to China for 20 years.

“The problem we have is the creative attitude of some Chinese. They sometimes use our name in funny ways,” he said in a telephone interview from Paris.

Several wines on the market in China are branded with names close to Château Lafite, including Chatelet Lafite. Chatelet is the name of one of the busiest subway stations in Paris.

Lafite “is such a generic brand in China that it has widespread appeal as a name and as a status symbol,” Mr. Boyce said.

The mystique extends beyond the wine — in Beijing, there is a La Fite British Exotic Bar and the Beijing Lafitte Chateau Hotel.

The first step for anyone counterfeiting wine is to find or manufacture a bottle that is close to the original.

“People will also use real bottles with something else inside or make labels that are spelled differently,” said Cheng Qianrui, the wine editor for the Chinese lifestyle Web site Daily Vitamin. “If you know wines, you can tell, but not a lot of Chinese do.”

The 10 percent surge last year in wine imports over 2011 was led by Spain, which accounted for 36 percent of cheaper bulk wine imports to China in 2012, according to Chinese customs figures. Bulk wine accounted for just under half of all wine imports last year.

The copyright problems, however, tend to involve the better-known brands.

The importer Torres Wines includes Château Mouton-Rothschild, another top-ranked Bordeaux, in its portfolio. Sun Yu, sales director, said phony wine brands like Mouton & Sons or Edouard Mouton popped up in the Chinese market: “It happens in secondary or third-tier cities where they don’t have much wine knowledge.”

Elite winemakers are trying to fight back, sometimes by smashing bottles after tastings, to prevent them from being refilled with fakes for resale.

Anti-counterfeiting measures by major international spirit brands, which also fall victim to fakes in China, include bottle buyback programs, tamper-proof caps and the covert tagging of bottles. But such measures are less common with wine brands, according to an executive at an international beverage company in China.

Domaines Barons de Rothschild has been putting tamper-proof tags on bottles of Château Lafite and its second label, Les Carruades de Lafite, since the 2009 vintage.

But the producer has been protecting its elite bottles since 1996, Mr. Salin, the company president, said, with four other identification techniques that he would not reveal. “If you show me a bottle of Lafite, I can instantly tell you when it was bottled, a lot of things,” he said. “To counterfeit it is not easy.”