Counterfeiting is nothing new. In ancient Greece, enterprising schemers would cover less valuable coins with a layer of precious metal to swindle unsuspecting tradesmen, and in the 16th Century the Spanish colonial authorities in Meso-America created fake indigenous stone artwork work to supply booming demand back home in Europe. Even the great Renaissance luminary Michelangelo created a fake Roman sculpture of Eros, god of love, early in his career, treated with acid to reproduce the effects of aging, and sold it through a broker to the Cardinal Raffaele Riario, a wealthy collector. As of 2022, it was estimated counterfeit luxury fashion goods industry had reached upwards of $4.2 trillion – from low-end fake rolexes being sold in the back alleys of New York to near perfect reproductions of LVMH handbags being sold as originals on the internet.
Thus, with coveted whiskies being marked up hundreds and sometimes thousands-of-percent, the market incentives for counterfeiting whiskey, and the risk to unknowing consumers, has increased substantially. While selling whiskey on the secondary market is technically illegal, it is largely ignored by authorities and rarely prosecuted, and many transactions take place in online communities or through friends of friends. The often impersonal nature of the transaction; the wide audience through, and relative anonymity of, the internet; the sophistication of counterfeiting techniques; online hype for specific products; and the speed of transactions all work in the favor of whiskey swindlers.
Most selling fake products whiskey are well aware of the whiskies erroneous provenance, but some are not, as bottles may change hands more than once – there are some examples of bottles believed to have been counterfeited decades prior that have been bought and sold several times, giving them an independent legitimacy. Notably, some auction houses, which are staffed by experts in the field, have been fooled by fake products, and some have no doubt been complicit in the passing off of less-than-genuine whiskey. Generally speaking, however, auction houses live and die by their reputations and have a vested interest in rooting out fake products and working closely with authorities to catch the perpetrators.
The scope of the problem is broad since whiskey counterfeiters are duping potential buyers in several different ways. On the low end of the spectrum, something commonly found in some Asian markets, is simple dilution and adulteration of whiskey. Whiskey is diluted with water or other inexpensive compounds to increase volume and stretch stocks. Some countries have relatively loose consumer protection law enforcement, and introducing bottles of diluted product is relatively easy. Much like the generally unregulated whiskey and food market pre-1900 in the U.S., eating or drinking something that is deliberately mislabeled can lead to health issues — in the recent past, fraudsters in China were peddling many fake products, from noodles made with a high percentage of cardboard to fake eggs (in the shell) manipulated with syringes and petroleum by-product.
Other methods used by counterfeiters include the substitution of authentic whiskey and label and packaging replication. The substitution of authentic whiskey involves refilling a bottle of high-quality, generally sought after, whiskey with a lower-grade product. Adam Herz, a well-known whiskey collector and member of the L.A. Whiskey Society, began comparing the bottle numbers of empty Pappy Van Winkle being purchased online through eBay to ones being sold through various whiskey communities. What he found was that many empty bottles, which were fetching unreasonably high premiums online, were, in fact, being refilled and sold as authentic Pappy Van Winkle, passably resealed— dead to rights based on product number comparisons. In other instances, to complete the illusion, scammers were obtaining the base materials, such as bottles, labels, capsules, and stoppers needed to counterfeit their products using similar (or identical) technology to that being used by the distillery.
While some try to paint whiskey counterfeiting in “Robin Hood” terms of the little man stealing a little back from the corporate behemoths, the reality is that whiskey counterfeiting has an impact on the broader industry, largely based on the scale in recent years. In addition to the obvious health risks, noted above, the volume of counterfeit bottles in the secondary market erodes public trust in authentic brands, which leads to reduced sales and financial loss. Like most businesses, those costs eventually get passed on to the consumer through higher prices. Likewise, widely publicized incidents of forgery erode trust in the industry as a whole, and raises credibility questions for legitimate retailers playing by the rules. It additionally threatens tougher legal action on the secondary markets, where many buy, sell, and trade based on a true passion for collecting.
There are no “silver bullet” solutions as counterfeiters keep up with security measures developed to thwart their activities. But there are some innovative steps being taken. Distilleries are investing in sophisticated packaging designs and security features to combat forgery. Examples include, tamper evident seals, holographic labels, unique bottle shapes, and the closer tracking of serial numbers. Cutting edge printing techniques, microprint, and specialty inks also add layers of security, making it more challenging to replicate bottles. Additionally, some companies are levering technology to combat fraud through the implementation of blockchain, Radio-Frequency ID (RFID) chips, and QR code to help verify the authenticity of a whiskey in real-time. These technologies can instantaneously offer insight into the bottles origin, production, and transportation history.
Distilleries, distributors, and retailers are also involved in more active dialogue with authorities (and each other) about emerging trends in forgery, to establish best practices to combat forgery and ensure operators at all levels in the supply chain are well equipped to fight this growing problem. This is being paired with more information being made available to consumers about how to identify fake bottles. By removing barriers to the flow of information, and educating the public about things to look for when buying a highly sought after bottle on the secondary market (or even that overpriced bottle sitting on the top shelf of the mom and pop store you stopped by on a cross country road trip).
The problem of counterfeiting goods has been around for centuries and shows no sign of abating anytime soon. Where there is a lucrative market for a luxury good, counterfeiting will be present. Whiskey is no different and the resurgent global popularity of whiskey is, naturally, driving growth in the whiskey fraud market. However, with increased awareness and new technology being developed, there is hope for the industry to fight back and ensure consumers are getting an authentic product.
