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Wines & Spirits - Anti Counterfeit & Brand Protection

  • ID: 3507849
  • Report
  • November 2015
  • Region: Global
  • 250 Pages
  • Vandagraf International Limited


  • Diageo
  • Guala Closures Group
  • Noel Corporation
  • Reynolds Group
  • MORE
Product Crime - Wines & Spirits

Wines & spirits are:

- Widely counterfeited
- Subjected to various forms of tampering, refilling and / or dilution
- Targeted by smugglers (particularly between countries with contrasting high & low excise tax regimes).

Counterfeiting operations in particular can be scaled up and can be highly lucrative and are known to be often linked to organised crime networks and in some cases terrorist groups.

Look-Alike Counterfeits Versus Refilling Of Genuine Empty Bottles

The problem of copy or look-alike products is widespread for spirits and also wines. Such copy and look-alike products aim to perform the same function as a genuine product, but are produced by an independent manufacturer under a similar name, and nearly always are of inferior quality.

The products are sold in markets where consumers are vaguely familiar with Trade Marks and international brands but often have little comprehension of English - All major spirits brands are vulnerable to such attacks. Nonetheless it is clear that such challenges have by no means deterred counterfeiters in China.

Unfortunately, no matter how sophisticated the on-bottle devices may be and how many steps are taken to protect a genuine empty glass bottle to prevent illicit copying or reproduction of a particular glass bottle, the widespread practice of obtaining empty genuine bottles and refilling them tends to subvert this type of approach brand protection. This practice is particularly prevalent in China and needs to be factored in to any brand protection strategy.

Counterfeiters are generally compelled to rely on either:

- Look-alike counterfeits using standard bottles which can only approximate to the appearance of custom made bottle
- Collecting and re-filling empty used bespoke proprietary bottles and this generally means that the original genuine label is still attached to the bottle.

All major wines & spirits brands are vulnerable to such attacks and both approaches are widely used by criminals today.

Look-Alike Spirits Bottles

Such copy and look-alike products aim to perform the same function as a genuine product but are produced by an independent manufacturer under a similar name, and nearly always are of inferior quality. The products are sold in markets where consumers are vaguely familiar with trademarks and international brands.

Worthy of note are the spelling mistakes on the labels. This is quite common and is a strong indicator of a counterfeit product. It seems likely that the actual glass bottles may be commodity standard bottles obtained on the open market.

The Fine Wine Empty Bottle Trade

Increasingly, counterfeiters have been finding that it can be easier to obtain and refill genuine empty bottles of high end wines & spirits than to try to replicate original glass bottles. With this approach the original genuine label is usually still attached to the bottle.

China's booming wine market has created an extraordinary demand for empty bottles of famous wines (primarily from prestigious French vineyards) with fraudsters willing to pay up to $475 USD (or even more for something really special) for a good bottle that can be re-filled with something less expensive.

Fine wine counterfeits in China range from the glaringly obvious to the very subtle (for example by refilling a Chateau Lafite '82 labelled bottle with Chateau Lafite '85 wine (which is quite a lot less expensive). In a country where, for example a highly desirable Chateau Lafite Rothschild 1982 can command as much as US$5,900, the empty bottle can fetch as much as $1,500 USD on the black market (the condition of the empty bottle is of course critical and affects the price).

For fine wines, an important skill for the counterfeiter is in the re-corking and re-capsuling. In fact fine wines (pre-1965 or so) often tend to have been re-corked anyway and this plays right into the counterfeiter’s hands.

In response, some European wine exporters have been campaigning for restaurants to:

- Smash the bottles after the genuine wine has been consumed so that they cannot be re-filled
- Also ensure that capsules are destroyed so that they cannot be illicitly re-used.
Note: Product cover images may vary from those shown


  • Diageo
  • Guala Closures Group
  • Noel Corporation
  • Reynolds Group
  • MORE
Executive Summary

1 Introduction
1.1 Types Of Product Crime - Wines & Spirits
1.2 Category Definitions
1.3 Some Major Initiatives In Brand Protection
1.3.1 The Anti-counterfeiting Trade Agreement (ACTA)
1.3.2 Interface Public Members (IPM) - WCO / GS1 - A Tool for Customs New Mobile IPM Launched in 2013 WCO Operations - Raids & Seizures
1.4 Key Drivers - Product Crime - Wines & Spirits
1.4.1 China & the Internet The Economic Boom of China The Rapid Growth of the Internet
1.4.2 Identification of High Risk Product Categories Powerful Motivators for Counterfeiters

2 Tax & The Role Of Government
2.1 Unrecorded & Illicit Alcohol
2.1.1 Unrecorded Consumption - Definition, Categories & Market Sizing
2.2 Some Perspectives On Taxing Wines & Spirits
2.2.1 Unintended Consequences of High Taxes on Alcoholic Drinks
2.2.2 Tax Differentials between Countries Fuels Product Crime
2.2.3 Smuggling & Counterfeiting within the EU
2.2.4 Case Study - Alcohol Smuggling between States in India
2.2.5 Policy Considerations - Impact on Misuse & Problem Behaviour
2.3 Excise Taxes On Alcohol
2.3.1 Excise Tax by Country
2.3.2 Alcohol Excise Tax Rates - By Country - World
2.3.3 Alcohol Excise Tax Rates - By State - US
2.4 Danger To Human Health
2.5 Excise Tax Stamps - Alcohol
2.5.1 Case Study - OpSec - Tax Stamp Security & Authentication
2.5.2 Case Study - SICPAtrace™ - Tax Stamp Security & Authentication

3 Wines
3.1 Wines - Trends
3.1.1 Wines - Key Trends
3.1.2 Wines - Regional Trends Old World versus New World Wines Old World Wines (Europe) New World Wines (US, Chile, Argentina, Australia, South Africa, Asia) Champagne versus Other Sparkling Wines
3.1.3 High Growth Chinese Wine Market
3.1.4 Impact of Tax Changes in Asia - Wines & Spirits China & Hong Kong - Tax Implications Fine Wine Auctions in Hong Kong
3.1.5 Chinese Investments in French Vineyards
3.1.6 The Wine Market in India - Potential for Growth
3.2 Product Crime - Wines
3.2.1 Counterfeit Wines - A Segmentation
3.2.2 Case Study - Red Bicyclette Brand - Ernest & Julio Gallo
3.2.3 Case Study - Mis-Labelled Italian Wines - Tuscany's Montalcino
3.2.4 Case Study - Counterfeit Wines in the UK - Jacob’s Creek & Other Brands
3.2.5 Examples of Counterfeit Corks, Capsules & Labels - Collectible Fine Wines
3.2.6 Case Study - US Chef Faces Lawsuit - Sale of Allegedly Counterfeit Fine Wine
3.2.7 Authentication of Fine Wines - Special Challenges
3.2.8 China - Counterfeit Wine - A Special Case The Fine Wine Empty Bottle Trade in China Case Study - A Visit to a Chinese Winery was Eye-Opening Defensive Registration of a Brand Mark in China Case Study - Australian Wine Brand Penfolds - Counterfeit Attacks in China Online Counterfeit Wine Sales in China
3.3 Brand Protection - Wines
3.3.1 The More Traditional Approach to Brand Protection of Wines
3.3.2 Some Leading Brand Protection Solution Providers - Wines
3.3.3 Case Study - Rioja Wine Wine Labels with Generic Hologram Denoting Region of Origin - Rioja Spanish Wine with Scrambled Indicia Code Label Case Study - Promotion and security of Spanish Wines - CTOV EU Systems for Geographical Indication and Traditional Speciality
3.3.4 Case Study - Opus One - US
3.3.5 Case Study - Shala One - Thai Wine with a Resemblance to Opus One Label
3.3.6 Case Study - Chateau Margaux & Chateau Lafite - Multiple Security Devices
3.3.7 Case Study - BubbleTag™ & Other Devices from Prooftag
3.3.8 Case History - Kodak Helps Napa Valley Wineries Fight Wine Fraud
3.3.9 Dispute Goes Legal - Mr. Koch (Collector) vs. Mr. Kurniawan (Counterfeiter)
3.3.10 The Mr. Koch Approach to Brand Protection - Fine Wines

4 Spirits
4.1 Spirits - Trends
4.1.1 Spirits - Key Trends Premiumisation In The Spirits Sector Proliferation Of Flavour Variants In Spirits - Vodka & Whiskey New Entrants & More Obscure Spirits Brands - Niche Appeal Implications Of Key Trends For Counterfeiting Of Spirits
4.1.2 Spirits - Regional Trends Western Markets - North America & Europe Emerging Markets Case Study - Diageo Asia Investment In Spirits Brand - Some Dangers
4.2 Product Crime Spirits
4.2.1 Counterfeit Spirits Manufactured by Criminals Hurts & Kills People in the UK
4.2.2 Case Study - Bootleg Alcohol - From Criminal Manufacture to Poor Students
4.2.3 Case Study - Counterfeit Spirits in the UK - A Steady Stream over the Years
4.2.4 China - Counterfeit Spirits - A Special Case Crackdown on Multiple Luxury Product ‘Gifting’ in China Protection for Chinese Brands in China
4.2.5 Russia - Counterfeit Spirits - A Special Case Vodka in Russia Counterfeit Whiskey in Russia Price Control Measures on Alcohol in Russia
4.2.6 India - Counterfeit Spirits - A Special Case
4.2.7 Case Study - Taiwan Seizures - Counterfeit Wines Spirits
4.3 Brand Protection - Spirits
4.3.1 Tamper evident / Holographic Shrink Sleeves
4.3.2 Molecular Micro-Taggants - Spirits
4.3.3 Case Study - Wu Liang Ye White Spirit - Multiple Brand Protection Features
4.3.4 The Scotch Whisky Association (SWA) - Anti Counterfeit Activities Protection as a Geographical Indication (GI) Brand Abuse by Subtle or Oblique References of Scottish Origin Counterfeit Scotch Whiskey Made in Europe - On the Increase
4.3.5 International Federation of Spirits Producers - IFSP
4.3.6 Operation Opson - Europol / Interpol - $ Millions Seized

5 Supply Side Industry Structure
5.1 Market Reach Of Brands - Wines Versus Spirits
5.2 Leading Companies - Wines & Spirits
5.2.1 Structure Of The Wine Industry
5.2.2 Structure Of The Spirits Industry
5.2.3 Leading Wine Companies - World
5.2.4 Leading Spirits Companies - World
Appendix - Leading Brands & Brand Owners - Wines & Spirits

6 A Strategic Approach To Brand Protection
6.1 The Path To Becoming A Provider Of Integrated Solutions
6.1.1 Integrated Brand Protection Solutions
6.1.2 Levels Of Defence - 1st, 2nd & 3rd
6.1.3 The Layered Approach For Enhanced Security
6.1.4 Major Types Of Security Solution& Selection Criteria
6.2 The Importance Of Packaging
6.2.1 Central Role For Packaging / Label Converters In Creating Integrated Solutions
6.2.2 Packaging Design Can Provide Additional Security

7 Security With Packaging
7.1 Packaging Components - Wines & Spirits
7.1.1 Characteristics Of Packaging - Wines & Spirits
7.1.2 Structural Packaging Formats - Wines & Spirits

8 Glass Bottles - Wines & Spirits
8.1 Economics Of Glass Bottle Making
8.2 Illicit Approaches To The Glass Bottle Challenge
8.3 High Tech Testing Techniques For Glass Bottles
8.3.1 Centre d’Etudes Nucleaires de Bordeaux Gradignan (CENBG) Laboratory
8.3.2 The Isotope Cesium-137 Test
8.4 Existing Moulded Bottle Codes
8.4.1 How To Read Moulded Glass Bottle Codes From O-I (Owens Iilinois)
8.5 Unique Codes For Individual Bottles
8.5.1 Laser Etched Coding / Marking Solutions - Glass Bottles
8.5.2 Case Study - Domino Laser Etching - Château Cheval Blanc
8.5.3 Unique Id Marking For Glass Bottles - Saverglass / St. Gobain, France
8.6 Personalisation Of Bottles - Colours, Engraving, Inserts

9 Closures, Corks, Shrink Sleeves & Capsules
9.1 Potential Security Benefits
9.1.1 Multiple Security Solutions - Wines & Spirits
9.1.2 Plastic Injection Moulded & Metal ROPP Closures - Wines & Spirits Case Study - Amcor Closures & N’CRYPT™ - Anti-counterfeit Solutions, Australia Case Study - Global Closure Systems (GCS) / UCP - UK / Germany Case Study - Guala Closures Group, Italy / Luxembourg Case Study - Reynolds Group / Closure Systems International, NZ Case Study - Herti, Bulgaria Case Study - Manaksia, India Case Study - Shandong Lipeng, China Examples of Premium Closure Designs - Spirits
9.2 Corks - Wines & Spirits
9.2.1 Traditional Cork Stoppers Facing strong Competition
9.2.2 Cork Stoppers versus ROPP Aluminium Closures
9.2.3 Cork Stoppers - Natural versus Synthetic
9.2.4 Cork Stopper Types Case Study - Corticeira Amorim, Portugal Case Study - Noel Corp. - Nomacorc, US
9.2.5 Corks are Central for Authentication of High-End Wines
9.2.6 Laser Etch Marking of Wine Corks
9.3 Shrink Sleeves & Capsules - Wines & Spirits
9.3.1 Shrink Sleeves Case Study - Sleever International & Piper Heidsieck Champagne, France
9.3.2 Case Study - CCL Decorative Sleeves, UK Case Study - Gilbreth Shrink Sleeve for Malibu RED Rum, US
9.3.3 Capsules Case Study - Amcor Capsules for Wines & Spirits

10 Smart Phone Authentication - The New Norm?
10.1 Worldwide Footprint - Smart Phones
10.2 Advantages Of Smart Phone Readable Codes
10.3 Addressing The Empty Bottle Refilling Problem With Smart Phones
10.4 Overview - Smart Phone Enabled Authentication
10.5 Why Smart Phones For Brand Protection?
10.6 Smart Phones - Mobile Marketing & Anti-Counterfeit
10.7 Selected Solution Providers - Smart Phone Enabled Brand Protection
10.7.1 Digimarc Discover™ - Smart Phone Enabled
10.7.2 Document Security Systems (DSS) - AuthentiGuard™ - Smart Phone Enabled
10.7.3 DuPont Authentication IZON™ - Smart Phone Enabled
10.7.4 Graphic Security Systems (GSSC) - Security Indicia - Smart Phone Enabled
10.7.5 Spectra Systems / InkSure - TruBrand™ - Smart Phone Enabled
10.7.6 tesa Scribos - dtect™ App - Smart Phone enabled

11 Market Sizing - Wines & Spirits
11.1 Evolution Of Markets For Wines & Spirits - By Volume / Value
11.2 Packaging Components - Market Sizing Estimates
11.2.1 Glass Bottle Volume Estimates - Wines & Spirits
11.2.2 Caps / Closures Volume Estimates - Wines & Spirits
11.2.3 Capsules / Shrink Sleeve Volume Estimates - Wines & Spirits
11.2.4 Label Volume Estimates - Wines & Spirits
11.3 Global Financial Losses - Counterfeiting & Piracy
11.4 Illicit Alcohol & Counterfeit Wines & Spirits
11.4.1 Counterfeit Wines & Spirits - Branded, Bottled & Traded
11.4.2 Counterfeit Wines & Spirits - China
11.4.3 Financial Losses Due To Counterfeiting - Wines & Spirits
11.5 Brand Protection Solutions
11.5.1 Overview of the Market for Brand Protection Solutions - All Verticals in 2014
11.5.2 Financial Losses from Smuggling - Wines & Spirits Alcohol Smuggling Today Tax Differentials between Countries / States - An Important Driver of Smuggling Financial Losses - Uncollected Tax Revenues - Selected Countries Case Study - Excise Tax in the UK
11.5.3 Appendix - Market Data - Wines & Spirits Global Breakdown - Wines by Product Types Global Breakdown - Spirits by Product Types Global Breakdown - Wines & Spirits by Region Wine Sales Volumes - Some Famous Wine Growing Regions Wines - Annual Consumption by Country - Top 10 Ranking Spirits - Annual Consumption by Country - Top 10 Ranking Per Capita Consumption - Wines & Spirits
Note: Product cover images may vary from those shown
- Diageo
- Guala Closures Group
- Noel Corporation
- Reynolds Group
- The Scotch Whisky Association
Note: Product cover images may vary from those shown