Counterfeit Alcohol

With discoveries of counterfeit drinks making worldwide headlines already this year, it’s clear that fraudsters are managing to infiltrate the global FMCG market with alarming success. Many bargain-hunting consumers will be drawn to premium-branded products which come with a knock-down price tag, but they may not be aware they are putting their health at risk. Some counterfeiters are using ingredients or chemicals which are toxic to the human body to produce cheap fakes, with life-threatening results. In fact, 20 people lost their lives in the Czech Republic and 72 in Russia last year after consuming fake vodka.

The reality of counterfeit alcohol

If anything, the problem of counterfeiting is only getting worse. In January, Italian authorities seized 9,000 bottles of fake Moët & Chandon champagne, along with 40,000 well-crafted fake labels imitating the house’s branding. The problem is the tools fraudsters are using to create realistic, high-quality fake packaging are now available at a very low cost, which means counterfeit alcohol now looks sleek, professional and authentic – and much harder to detect with the naked eye.

As a result, developments in technology have seen fake packaging become increasingly convincing, and adulterated drinks are often difficult to detect without a taste test, which has allowed counterfeiters to move under the radar and flood the market with fake alcohol products. As well as life threatening results, counterfeiting can undo years of reputation-building by brands and counteract the millions of pounds they spend each year on marketing and on testing to ensure their products are of the highest quality.

This is evidenced by research from NetNames (‘Counting the cost of counterfeiting’, 2016), which found 78% of consumers would shun a brand if they found themselves on a fraudulent website pertaining to be the brand’s genuine site, despite the company itself not being negligent. Awareness plays an integral role in staying one step ahead of the fraudsters, and wine producers should ensure their customers know how to spot counterfeit goods before it is too late.

To address the rise in fake wines and spirits, it is crucial that both alcohol producers and stockists take a proactive approach to educating their customers on how to identify imitations, and regularly search and highlight known counterfeit operations. Brands can make this easier for their customers by setting up dedicated web pages that allow them to determine whether a product they have bought is counterfeit and allow them to report details of it and where it was purchased.

Online marketplaces such as eBay and Alibaba are also increasingly targeted by counterfeiters looking to sell fake alcohol products and fake packaging. As such, alcohol labels should regularly monitor these sites to identify any breaches to their intellectual property, and report these cases as soon as possible with the aim of having them removed.

How can Alcohol producers help the problem?

To fight back against global counterfeiters, labels should consider appointing a dedicated brand protection manager who can take on the task of monitoring and identifying counterfeit operations for a business. We would like to believe that a simple hologram would help validate the authenticity of the original product and with the higher security methods like pen laser validation make it very difficult for a forger to copy. The brand protection manager will then report any known counterfeit operations to the authorities, including the Food Standards Agency, the Intellectual Property Office (IPO), and the newly created City of London’s Police Intellectual Property Crime Unit (PIPCU) – which has already investigated more than £28m ($40m) worth of IP crime and suspended more than 2,000 domain names in its first year alone.

The alcohol industry needs to adopt proactive anti-counterfeiting strategies like these to keep the fraudsters at bay. With a strong brand protection plan in place, wine and spirit producers can fight back against the threat of fraudsters, safeguarding not only their reputation, but the safety of their customers – allowing wine lovers to enjoy their favorite brands for years to come.

 

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