Counterfeit wine has been much in the media in recent weeks (eg. Wine maven Kurniawan, convicted of fraud, loses bid for freedom ; Billionaire Koch brother's crusade against counterfeit wine ; Why it’s so hard to tell if a $100,000 bottle of wine is fake ; Napa wine merchant accused of fraud in client's lawsuit). We have even gotten to the stage where there is fake news about allegedly fake wines (Penfolds hit by fake wine claims).
Discussion of these topics seems to range from outrage at the fraudster, through fascination with how it's done, to wondering how much of it has been done (eg. $100 million of counterfeit wine in circulation ; 20% of all wine in the world is fake). Among all of these news stories and commentaries, there is one general point that seems not to have been emphasized — wine collector fraud and wine consumption fraud are two different things. Furthermore, wine collector fraud requires a combination of massive wealth and massive snobbery on the part of the collectors — if there were no people with this combination of characteristics, then collector frauds would not even be conceived, let alone perpetrated.
There are two types of wine fraud
Fraud directed against wine collectors is a rather different thing from most other frauds, which are usually grouped as consumption fraud rather than collector fraud. Far too much of the wine discussion has failed to clearly distinguish these to types of fraud, which are clearly described by, for example, Lars Holmberg (2010. Wine fraud. International Journal of Wine Research 2: 105-113). The difference is very important, because consumers and collectors are very different people. The main purpose of this blog post is to call attention to this distinction.
Consumption wine fraud is usually directed at inexpensive or mid-price wines, and includes things like: misrepresenting the grape variety, grape origin or alcohol content; adulterating the wine with sugar, water, coloring, flavors, or something much worse (like glycol or lead); and running a retail ponzi scheme. These things can be done on a large scale, and they potentially affect all consumers. Collector fraud, on the other hand, usually involves luxury wines, and is directed almost solely at individuals with more money to pay for the wine than they have technical ability to correctly identify that wine.
In the latter case, irrespective of what we may feel about the fraudster, we should recognize that the collectors who bought the wines are ultimately victims of their own snobbery, and having the wealth to display that snobbery. Anyone who spends tens of thousands of dollars on a bottle of wine can only be doing so for the snob value of having people know that they did this (Campbell Mattinson: "the rich and powerful need something rich and powerful to spend their money on"). These are wine investors, not wine drinkers, and so we are actually talking about wine investment fraud, which is not too dissimilar to art investment fraud. This is a far cry from consumption frauds directed at wine drinkers in general.
Wine can be a good financial investment, of course, but only if you can authenticate the wine. This is a very hard and expensive thing to do. Perhaps these investors might consider some alternative means of disposing of their massive wealth? There are plenty of people besides fraudsters who would like the opportunity to make good use of the money; and many of these people actually perform publicly useful services, rather than the solely private one of enhancing investor snobbery.
Interestingly, there seems to have been no diminution of the prices of rare wines, in spite of all of the fuss about collector fraud (Q&A: François Audouze, wine collector). This illustrates the illogicality of luxury wine prices.
Wine snobbery comes in many guises. Snobs are conventionally considered to be those people who value exclusivity and status above everything else. However, there are alternative ideas about this characterization. For example, Jeany Miller (The parasitic nature of the wine fraud) has suggested that: “Wine snob is an affectionate term for people who understand and enjoy wine." This may be giving the real snobs a bit too much credibility, but it does emphasize the wide-ranging nature of the term. In particular, not all wine snobs have massive wealth, although a certain level of financial liquidity is obviously required. Snobbery on its own is usually relatively harmless, but combining it with increasing wealth is simply asking for increasing amounts of trouble.
Wine snobbery has been a topic of discussion for quite a while. For example, whole books on the topic have been around since the 1980s, varying from the humorous (The Official Guide to Wine Snobbery, by Leonard S. Bernstein, 1982) to the very serious (Wine Snobbery: an Insider's Guide to the Booze Business, by Andrew Barr, 1988).
Barr, in particular, describes how a large section of the drinks industry relies on snobbery for its profitability. Luxury wines cost an arm and a leg (see The cost of luxury wines), but they are not much better in quality than wines costing a tenth of the price (see Luxury wines and the relationship of quality to price). It takes snobbery and wealth to get involved in this segment of the refreshments business.
Fortunately for those of us who understand and enjoy wine, and therefore might conceivably be considered snobs, there is another segment of wine snobbery that requires expertise rather than wealth — knowing about little-known wines and regions requires time and effort, but not necessarily wealth. For example, few Americans know much about Australian wine, and yet Australia is a continent as well as a country, and it therefore has as wide a diversity of wine regions and wines as any other continent. Wine writers are often lazy, and they treat "Australia" as a single wine region, just as they do for any of the much smaller countries of South America or Europe, in spite of its greater vinous diversity than most of these other countries. You can get a lot of snob value out of knowing more about Australian wine than just shiraz! (Some examples: So much more than “just shiraz”! ; Why there's more to Australian wine than chardonnay ; Alternative Australian wines.)
Old bottles of wine also provide snob value, of course, but they can often do this without much monetary expenditure. In Europe, old wine is available on eBay, but massive wealth is not usually to be found there — the wealthy shop elsewhere than eBay (or Amazon). Snobbery is available on eBay, like anywhere else, but it is not massive — there is little snob value to be gained from saying that you shop on eBay. But turning up to dinner with an old bottle of wine does not require that you tell anyone where you got it!
Consumer wine fraud has been detected involving some relatively inexpensive wines, as well as the more newsworthy expensive ones, and so caveat emptor always applies, on eBay as much as anywhere else. However, on eBay it is much more likely that an old bottle of wine will be undrinkable, rather than that it will be drinkable but not what the label says it is. Poor storage of old bottles is a far bigger risk than is a problematic pedigree. It is for this reason that reputable sellers on eBay emphasize that you are buying the bottle not its contents.
Perhaps that is a warning we should put on all old bottles, no matter what their price or provenance?
You are buying the snob value of the label, not the wine — pay accordingly, and don't complain.Postscript
For a later, but similar, take on the importance of distinguishing the two types of wine fraud, see Oliver Styles' commentary: Worried about wine fraud? that's rich.