Category Archives: wine fraud

Thanksgiving Flashback: Great Seattle Wine Heist

November 24, 2020 By in wine, wine fraud 6 Comments


It’s Thanksgiving week here in the United States, a time to relax, enjoy, and be grateful. But that’s not always easy to do in these difficult times.

Do you need something to take your mind off worries about the election, Covid-19, and the Seattle Seahawk’s unpredictable defense? We have just the thing: a dramatic wine crime story. Here is a flashback to Thanksgiving 2013: The Wine Economist’s report on the Great Seattle Thanksgiving Day Wine Heist.

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Wine Economist: CSI Fine Wine Edition

  • Crime doesn’t pay.
  • The best way to make a small fortune in the wine business is to start with a big one.

What happens when you combine these two old sayings? Well, you would think that it would add up to the fact that if crime doesn’t pay, then wine crime really doesn’t pay. But that may not be true. How else can we explain the recent fine wine crime wave, which may well be just the tip of the iceberg.

Wine Crime Wave?

Most of the attention has been focused on Rudi Kurniawan’s recent conviction for wine fraud — the first federal criminal prosecution and conviction for wine counterfeiting. This dramatic crime and the revealing trial has really captured the public’s imagination in part, I think, because of the romance associated with rare wine and the “lifestyles of the rich and famous” environment of the crime, the criminal and the victims.

There’s also a bit of what you might call a “Lance Armstrong” effect. The crime went on for years along with accusations, defenses and denials. Then suddenly there was the trial, the conviction and the house of cards collapsed. Now we are left to wonder how widespread this sort of wine fraud might be and what wines are true and which are false. The conviction isn’t the end of the story, only the beginning of the next chapter in the mystery.

Thanksgiving Day Heist

The Thanksgiving Day wine heist in Seattle was a grittier affair but perhaps equally interesting to wine crime buffs. I’ve been trying to piece together what happened from published reports and private sources. The more I learn about it the more this crime reminds me of something from a television show — CSI or maybe Mission Impossible!

Here is what I think I know.

Two “common thieves” (plumbers by trade, according to the Seattle Police) broke into the wine storage facility operated by Esquin wine merchants in the SoDo neighborhood (SoDo stands for South of the Dome — the Kingdome sports stadium in this case, which was demolished by implosion in 2000). They ransacked 15 of the 450 private storage lockers in the climate-controlled facility and made off with more than 200 cases of wine valued at more than $600,000.

If you are doing the math, that’s an average of more than $3000 per case or more than $250 per bottle. I’m guessing that no Two Buck Chuck was taken!

The break-in was ingenious — the perpetrators apparently cut a hole through a wall and brought the wine out case by case. Police report that the crooks spent  13 hours selecting their wines and then driving the loot to another warehouse less than a mile away. Their SUV getaway vehicle had limited capacity, so they had to make 9 round trips. Although they blacked out all the security cameras that they could, apparently this was not completely successful and some images of the crooks and their SUV’s license plate were captured.

You would think that “common thieves” would not be terribly discriminating wine shoppers — after all I suspect that most of the bottles and cases at this storage facility were of some value. Why not just smash and grab? But that’s not what happened.

Making a List, Checking it Twice

The bad guys apparently worked from some sort of shopping list, taking specific wines and vintages and leaving the rest. I’m told that the only Washington State wines taken were Quilceda Creek and Corliss, for example. Leonetti and Andrew Will? Apparently not up the discerning crook’s standards! I understand that wine was not just stolen, but also moved around and mixed up during the extended shopping spree and a few of the victims are apparently having to sort out which wines are theirs and which belong to someone else as well as which bottles have gone missing.

A good old-fashioned paper trail of evidence helped solve the crime and now opens the door to other possible heists. The first criminal captured had apparently kept receipts from a home improvement store — great idea in case you need to return an item! — and police used the day/time information on the paper to access security camera footage showing the suspect and his accomplice buying  the hardware used in the criminal act.

According to the Seattle Times a second paper trail opens the door to an earlier wine crime.

A shipping label found in Harris’ wine-storage locker led detectives to a San Francisco wine consultant, who told police he purchased $100,000 of wine from Harris and another man in April or May, charging papers say. Through an online search, Detective Don Jones determined there had been a large wine theft in the Bay Area in March, the papers say.

Covering Their Tracks

A KOMO news report added a another Mission Impossible-style detail about the carefully plotted plan to crack the wine storage facility.

New details from the charging documents filed Monday reveal police found a journal labeled “The Plan” in Harris’ SUV. The journal reportedly included a step-by-step guide to the crime, a list of needed equipment, steps to destroy any evidence, steps to ship the wine and how to leave the country.

In addition, police found a book titled “Thinking  About Crime,” as well as printed out documents called “Is it Accidental Fire or Arson?” and “How to Commit the Perfect Crime,” inside Harris’ house, according to the charging documents.

Where does the arson come in? Well, the thieves planned to cover their tracks in the most comprehensive possible way. They cut  gas lines and expected the building to blow up. Good fortune prevented any loss of life and good police work captured the criminals. Some of the victims are more upset about the idea of the flaming cover-up plan with its potentially tragic consequences than the actual robbery.

So case closed for now — the thieves in custody and a good chance that most of  the wine (minus one  empty Champagne bottle) has been recovered. But are these two common thieves the whole story? Or is there a criminal mastermind (not necessarily Rudi K) still at large making up a shopping lists for clients too smart to buy fakes but maybe not too smart to avoid stolen goods? Good question!

So welcome to the new era of wine crime where the questions a fine wine enthusiast needs to answer now range from red or white and Burgundy or Bordeaux all the way to real or fake, stolen or legit? Cheers!

CSI Fine Wine Edition

January 7, 2014 By in wine fraud, wine investment, wine markets 1 Comment

  • Crime doesn’t pay.
  • The best way to make a small fortune in the wine business is to start with a big one.

What happens when you combine these two old sayings? Well, you would think that it would add up to the fact that if crime doesn’t pay, then wine crime really doesn’t pay. But that may not be true. How else can we explain the recent fine wine crime wave, which may well be just the tip of the iceberg.

Wine Crime Wave?

Most of the attention has been focused on Rudi Kurniawan’s recent conviction for wine fraud — the first federal criminal prosecution and conviction for wine counterfeiting. This dramatic crime and the revealing trial has really captured the public’s imagination in part, I think, because of the romance associated with rare wine and the “lifestyles of the rich and famous” environment of the crime, the criminal and the victims.

There’s also a bit of what you might call a “Lance Armstrong” effect. The crime went on for years along with accusations, defenses and denials. Then suddenly there was the trial, the conviction and the house of cards collapsed. Now we are left to wonder how widespread this sort of wine fraud might be and what wines are true and which are false. The conviction isn’t the end of the story, only the beginning of the next chapter in the mystery.

Thanksgiving Day Heist

The Thanksgiving Day wine heist in Seattle was a grittier affair but perhaps equally interesting to wine crime buffs. I’ve been trying to piece together what happened from published reports and private sources. The more I learn about it the more this crime reminds me of something from a television show — CSI or maybe Mission Impossible!

Here is what I think I know.

Two “common thieves” (plumbers by trade, according to the Seattle Police) broke into the wine storage facility operated by Esquin wine merchants in the SoDo neighborhood (SoDo stands for South of the Dome — the Kingdome sports stadium in this case, which was demolished by implosion in 2000). They ransacked 15 of the 450 private storage lockers in the climate-controlled facility and made off with more than 200 cases of wine valued at more than $600,000.

If you are doing the math, that’s an average of more than $3000 per case or more than $250 per bottle. I’m guessing that no Two Buck Chuck was taken!

The break-in was ingenious — the perpetrators apparently cut a hole through a wall and brought the wine out case by case. Police report that the crooks spent  13 hours selecting their wines and then driving the loot to another warehouse less than a mile away. Their SUV getaway vehicle had limited capacity, so they had to make 9 round trips. Although they blacked out all the security cameras that they could, apparently this was not completely successful and some images of the crooks and their SUV’s license plate were captured.

You would think that “common thieves” would not be terribly discriminating wine shoppers — after all I suspect that most of the bottles and cases at this storage facility were of some value. Why not just smash and grab? But that’s not what happened.

Making a List, Checking it Twice

The bad guys apparently worked from some sort of shopping list, taking specific wines and vintages and leaving the rest. I’m told that the only Washington State wines taken were Quilceda Creek and Corliss, for example. Leonetti and Andrew Will? Apparently not up the discerning crook’s standards! I understand that wine was not just stolen, but also moved around and mixed up during the extended shopping spree and a few of the victims are apparently having to sort out which wines are theirs and which belong to someone else as well as which bottles have gone missing.

A good old-fashioned paper trail of evidence helped solve the crime and now opens the door to other possible heists. The first criminal captured had apparently kept receipts from a home improvement store — great idea in case you need to return an item! — and police used the day/time information on the paper to access security camera footage showing the suspect and his accomplice buying  the hardware used in the criminal act.

According to the Seattle Times a second paper trail opens the door to an earlier wine crime.

A shipping label found in Harris’ wine-storage locker led detectives to a San Francisco wine consultant, who told police he purchased $100,000 of wine from Harris and another man in April or May, charging papers say. Through an online search, Detective Don Jones determined there had been a large wine theft in the Bay Area in March, the papers say.

Covering Their Tracks

A KOMO news report added a another Mission Impossible-style detail about the carefully plotted plan to crack the wine storage facility.

New details from the charging documents filed Monday reveal police found a journal labeled “The Plan” in Harris’ SUV. The journal reportedly included a step-by-step guide to the crime, a list of needed equipment, steps to destroy any evidence, steps to ship the wine and how to leave the country.

In addition, police found a book titled “Thinking  About Crime,” as well as printed out documents called “Is it Accidental Fire or Arson?” and “How to Commit the Perfect Crime,” inside Harris’ house, according to the charging documents.

Where does the arson come in? Well, the thieves planned to cover their tracks in the most comprehensive possible way. They cut  gas lines and expected the building to blow up. Good fortune prevented any loss of life and good police work captured the criminals. Some of the victims are more upset about the idea of the flaming cover-up plan with its potentially tragic consequences than the actual robbery.

So case closed for now — the thieves in custody and a good chance that most of  the wine (minus one  empty Champagne bottle) has been recovered. But are these two common thieves the whole story? Or is there a criminal mastermind (not necessarily Rudi K) still at large making up a shopping lists for clients too smart to buy fakes but maybe not too smart to avoid stolen goods? Good question!

So welcome to the new era of wine crime where the questions a fine wine enthusiast needs to answer now range from red or white and Burgundy or Bordeaux all the way to real or fake, stolen or legit? Cheers!

>>><<

I can’t resist adding the opening credits from the Mission Impossible television show.

The BRICs: Two Faces of Chinese Wine

January 28, 2011 By in BRICs, China wine, emerging wine regions, wine fraud, Wine Wars 5 Comments

This is the fifth in a series of articles on wine in the BRICs – Brazil, Russia, India and China. Today I discuss the cultural contradictions of wine in China. Coming soon: wine in the New BRICs.

Wine, Fake Wine and Chinese Wine

China’s rise in the the world of wine is having many surprising effects. One of the most unexpected is this: apparently the most valuable bottle is my tiny cellar is an empty one — this jeroboam (double magnum) of 1994 Chateau Pêtrus. It is a souvenir of a particularly decadent party thrown by friends to celebrate their son’s graduation from college. Somehow I ended up with custody of the empty bottle.

Bottles like this are in high demand in China, according to recent news reports. Chinese entrepreneurs will reportedly pay up to £300 for an empty trophy wine bottle (especially Lafite), to be refilled with a lesser vintage wine and sold to gullible consumers or collectors. Provenance is important and condition matters:

“The bottles need to be in the best condition possible,” said another dealer, called Mr Ye, at a Shanghai company. “It is very important. And I only want genuine bottles, no fakes,” he added.

No fakes! I love it.

This sort of wine fraud is noteworthy just now because of all the attention that is focused on wine in China, but it there’s really nothing exceptional about this kind of scam. The story of The Billionaire’s Vinegar and its after-shocks suggest that fake wines are as common as fake Dalí prints — more common, actually, if you take Gallo’s embarrassing accidental purchase of bogus Pinot Noir into consideration.


But the story gets worse. A few weeks ago Chinese authorities raided 30 wineries in the Hebei region near Beijing (sometimes called “China’s Bordeaux)) for making chemical-laced fake wines.

CCTV’s footage showed a local sales manager admitting that some wines made in the coastal city of Qinhuangdao contained only 20 percent of fermented grape juice, with the rest being composed of sugar water mixed with chemicals, including coloring agents and flavorings.

Huang Weidong, a leading expert on the wine industry from the China Alcoholic Drinks Industry Association, said that the additives could cause headaches and irregularities in the rhythm of the heart, as well as cancer.

Solving the Puzzle

I’ve written about wine in China more than any of the other BRIC nations (follow the links in the next few paragraphs to read the posts), but fraud has only come up once before, in my report on Canadian Ice Wine.  China is a major market for this glorious elixir and some reports suggest that as much as a third of the stuff sold in China is bogus.

My reports on wine in China have been quite varied, covering a number of different topics. For example, China is on the verge of becoming a dominant force in global auction market for wine. I noted the change when Hong Kong dropped their punitive tariffs in an attempt to attract the auction houses and again in my report on last year’s Bordeaux en primeur circus.

In terms of the domestic market, I examined the factors that seem to be holding Chinese wine back in terms of quality and found that the biggest problems are in the vineyards, where China’s fragmented agriculture presents a roadblock. The best wines, like Grace Vineyards, come from wineries that have found ways to solve this puzzle.

Everyone wants to break into the Chinese market, including the Australians — especially given their current problems — the Portuguese and some of my American friends, but the French have a (perhaps unfair) advantage.  The image of the great first growths casts a long shadow at present, although I expect that Chinese wine consumers will get smart soon. They are so savvy in everything else that I think they will develop a more sophisticated idea of wine pretty fast.

I note, for what it is worth, that President Obama made a point to serve some really excellent American wines to Chinese President Hu at the recent White House state dinner in his honor.  The Quilceda Creek Cab can compete with fine French wines and I’ll bet the Poet’s Leap dessert wine was a hit, too.

The Two Faces of Chinese Wine

So what do I think about Chinese wine today? Well, I am still concerned about the quality of the grapes themselves and the  supply chain that delivers them to the wineries, which I believe are the biggest roadblocks to development, not the fraud that is the focus today. But, that aside, I find myself surprisingly optimistic.

China gets a whole chapter my forthcoming book on the Wine Wars (you can now pre-order it on Amazon.com!). It starts with my first rather revolting taste of Chinese wine and ends, many pages later, with another tasting, this time of one of China’s most notable wines.  Here’s an excerpt from the final draft:

Our Grace Vineyards Cabernet Franc was a solid effort, we thought, but nothing special– a bit light compared American wines of this type. Writing in The Wine Economist, I noted a distinctive “green” taste I associate with wine made from under-ripe Cab Franc grapes. A problem in the vineyard, I speculated. Maybe the climate’s just too contrary to fully ripen these grapes.

A day later one of my readers lobbed in a counterargument.[i] Maybe, he said, that green flavor is intentional. He had heard that this particular flavor is familiar to Chinese consumers and that some Chinese wineries harvest grapes a bit earlier in order to achieve it. It wasn’t a flaw in the wine, he suggested, but a feature. Something that makes it Chinese wine, not a Chinese imitation of someone else’s wine. It’s the Chinese market terroir, if you will. Maybe the thinness that the critics note is another reflection of local taste?

That got me to thinking. Maybe we were judging Chinese wines by the wrong standards. What matters most? How I feel about the wines (and how they compare to international standards) or how the Chinese consumers look at them? Interesting question.  So I hit the books.

A little research turned up more evidence that the judgments of Western critics might be unfair to Chinese wines. Jeannie Cho Lee, Korea’s first Master of Wine, argues that Asian food and wine traditions prime consumers to think about wine differently and to appreciate different qualities in it.[ii] Why don’t Chinese wine drinkers appreciate that a crisp Pinot Gris pairs nicely with their cuisine? Well, Ms. Lee explains, many Asian cultures do not consume beverages (apart from savory soups) with their meals – they drink them before and after. White wines are generally chilled, of course, and most Asia drinks are warm or room temperature. And the sweetness of a Pinot Gris can seem unrefined to palates that are used to more complex sweet-sour flavor profiles.

Why such a fascination with Bordeaux? It could be the tannins, Ms. Lee argues, which are appealing to wine drinkers from cultures with a tradition of consuming very tannic teas. Even the basic flavor reference points are different, she explains. Westerners think of Pinot Noir in terms of raspberries and strawberries, for example, but the Asian descriptors would be yangmei (bayberries), dried wolfberries and dried bonito flakes! An Asian description of Sauvignon Blanc would start with pandan leaves and longan and move on to mangosteen – not a familiar flavor or aroma vocabulary for me. But I can relate a bit better to her description of Riesling: Thai white blossoms, lemongrass and green mangoes.

Hmmm. So maybe it’s time to rethink Chinese wine.

Wouldn’t it be great if the most important qualities of Chinese wines – the ones that Westerners reject — turn out to have been lost in translation and that a true indigenous Chinese wine culture evolved, one that reflects China’s history, cuisine and palate. I hope so because it would support my theory of the future of wine. Suffering just now from the excesses of globalization and Two Buck Chuck, China needs to unlock its inner terroirist soul!

[i] Thanks to Bob Calvert for this insight.

[ii] Jeannie Cho Lee, “Language of Taste,” Decanter (July 2009), pp. 78-79.

The BRICs: Russian Wine Market Report

January 5, 2011 By in BRICs, health, Russia wine market, wine fraud, wine markets 5 Comments

This is the third in a series on wine in the BRICs – Brazil, Russia, India and China.

Just Say Nyet!

The BRIC nations used to be characterized as “emerging” or “transition” economies and in the case of Russian wine these terms still apply, but in a complicated way. Russia is an important wine country (the vineyards are down south, on the Black and Caspian Seas); it produced about 7.3 million hl of wine in 2007 according to OIV statistics, which puts it just behind Chile and ahead of Portugal in the world wine league table. But the domestic industry today is just a shadow of what it was 30 years ago.

Gorbachev’s 1980s anti-alcohol campaign (which included propaganda posters like this one) targeted wine along with spirits and both production and consumption of wine declined dramatically. The Global Wine Statistical Compendium indicates that per capita wine consumption in Russia more than doubled from 6.2 liters in the early 1960s to about 15 liters in 1970s (consumption of other forms of alcohol also rose — wine makes up less than 10% of Russia’s total alcohol intake) then fell dramatically as Gorby’s program gained traction.

The Gorbachev crackdown and continuing anti-alcohol efforts pushed wine consumption down to just 3.7 liters per capita by the late 1990s. It has risen since then, up to about 7 liters per capita today. Wine is only now reemerging and is still stained by its association with spirits and alcoholism.

Good Russian Wines Exist …

I have not visited Russia nor sampled any of the wines on offer there, but the reports I’ve read  make it sound like I am not missing too much.  There is fine wine in Russia, including some excellent domestic products as you will see below, but the good stuff is mainly imported and very expensive.   And the bad stuff is really really bad.

In fact I think the theme for this post should be that classic spaghetti western, The Good, The Bad and The Ugly. The good wines are certainly there. Jancis Robinson’s tasting notes from her 2009 visit to Russia include some tempting wines. A Myskhako Organic Red Cabernet 2008 from Kuban, Russia’s warmest wine producing region, received 16+ points out of 20 with the descriptive note, “Sweet and very wild and direct. Different! Very lively. Really wild tasting. Explosive.” Sounds like something I’d like to try.

A Fanagoria Tsimlansky Black 2007 Kuban (16 points) is “Dusty, bone dry, rather interesting flavours with good round tannins and acidity and plenty of fruit weight on the palate. Very dry finish with good confidence.” I’ll have a glass of that, please!

Along with the Bad …

Bad wines, and there are many of them, reflect Russia’s sorry wine history. It seems like every country has experienced the stage where wines are simple, sweet alcohol, sometimes to cover up faults and disguise poor wine making.  These bad wines still figure prominently in Russia.

Wine for the masses sells for less than $1 a liter in many cases and it seems to be sourced in bulk from whoever offers the least cost supply. Imported bulk wines from countries as varied as Spain, Ukraine, France, Argentina, Bulgaria and Brazil are shipped to factories near Moscow and St. Petersburg where they are mixed with sugar (to appeal to local tastes) and water ( to bring the alcohol level down to 10.5 percent), packaged and sent to market.

Traditionally much of the wine came from Moldova and Georgia, but these countries are on the Russian government’s political black list and Moldovan wines are currently banned, causing great hardship for a country that is very dependent upon wine for export earnings. Low quality is the official excuse — a Russian health official says of Moldovan wine “it should be used to paint fences” – but it is hard to see how Moldovan wines can be worse than the sugar water wines I just described. I think it’s politics.

But Then it Gets Ugly

The ugly wines are frauds — not even made from grapes in some cases. This video report suggests that perhaps 30% of the bottled wine on offer in Russia is counterfeit. This is bad for consumers, of course, but particularly bad for legitimate producers whose reputations suffer from unhappy experiences with fake wine.

Thinking of trying to sell your wines in Russia? Despite all that I’ve said, many people see great potential in the Russian market. Some are just interested in the “bad wine” bulk market, but others have grander plans. Russia is a BRIC, after all, one of the fastest growing major economies in the world. Russia will host the 2014 Winter Olympics and the 2018 soccer World Cup; this international exposure may accelerate changing domestic tastes. It is a major market for Champagne, with more than a million bottles purchased annually.

The Future of  Wine in Russia

As Russia’s middle class expands, a larger market for quality wines can be expected to emerge. So it is not surprising that winemakers are testing the waters and negotiating joint ventures of various sorts.

There are reasons to be cautious, however. Alcoholism is still a major concern in Russia and the expanding wine sector will have to swim  against a prohibitionist tide. Tastes and social attitudes will change as better quality becomes available, but the transformation will not happen overnight.

And then there’s the “oil patch” problem. Petroleum is a major driver of the Russian economy and this introduces an element of economic instability. Exporters will need to be able to ride out falling oil price effects in order to benefit from high price periods.

Finally, there is the Russian legal and administrative systems, which make it difficult to bring wines into the country and to assure payment. The fact that some in the Russian government would prefer that the wines stay away – because of the alcoholism problem – probably contributes to this problem.

It is easy to be very pessimistic about wine in Russia given its current state and recent history, but I believe that cautious optimism is warranted for the long run.  There are many cases of countries that have opened up their wine markets with positive results and perhaps Russia will follow this path. In the meantime, it looks like a difficult project.

Extreme Wine: O Canada Ice Wine

October 27, 2010 By in Canada, extreme wine, wine fraud, wine price 4 Comments

Ice wine, Canada’s distinctive contribution to the world of wine, holds a fascinating place in the world wine price tables and so qualifies for inclusion in The Wine Economist’s extreme wine series.

Top of the World

Which country gets the highest average price for its bottled wine exports? You might think it would be France with all those expensive Champagne, Bordeaux and Burgundy wines or Portugal with its costly eponymous after-dinner wines. But both of these countries also export a good deal of much cheaper wine, bringing their average  export earnings (USD per liter) down to $4.24 and $3.70 respectively. (Data are for 2005 from my copy of The Global Wine Statistical Compendium.)

New Zealand with its gorgeous Pinot Noirs and Sauvignon Blancs ($6.64) and the UK with its classy sparkling wines  ($6.87) both earn more per liter of bottled wine exports than the “usual suspects” of France, Germany, Italy, Portugal and Spain to say nothing of New World powers Argentina ($1.87), Australia ($3.65), Chile ($2.72) and South Africa ($2.42).

(Remember that wines that are exported for, say, $4.00 will have a much higher price on your store shelves due to transport  costs, distribution and retail margins and applicable taxes.)

At the very top of the table, for reasons that I think are due to exchange rate sand import resales more than domestic wine prices, is Switzerland ($8.23 per liter) followed closely by Canada ($7.32).  How can frigid Canada rate so high? Ice wine (or Eiswein) , of course!

The Highest Compliment?

Canada didn’t invent ice wine (credit Austria with that) but it is the world’s largest producer of this chilly wine, making nearly a million liters in a good year according to John Scheiner’s authoritative The Wines of Canada. Ice wine’s high cost is the biggest single factor in Canada’s lofty export earnings average.

Tiny bottles of ice wine bring enormous prices — $50, $100, even $500 and more for a half bottle at retail. Who pays these spectacular prices? Japan and other Asian countries are the largest export market.  Ice wine is the quintessential high end gift wine — attractively sweet, beautifully packaged and luxuriously expensive. Tourists snap bottles at Duty-Free to take home to Asia.

I’ve heard that so much ice wine is bought by Tokyo-bound travelers that some Canadian duty-free stores have special bonded facilities in Japan to make purchases more convenient. Pay at the airport in Canada and pick up your ice wine at baggage claim in Japan. Sweet!

Ice wines are so expensive and sought after in Asia that counterfeiting is a serious problem. Some experts believe that as much as 50 percent of the ice wine sold in Taiwan is bogus — sweet wines from Canada and elsewhere that are doctored up and repackaged.

Check out this image from the label of one of the faked wines — brewed, not fermented! Yikes. Must have got ice wine mixed up with ice beer. These may be big counterfeiting operations, but not necessarily sophisticated ones.

A recent Globe and Mail article suggests the problem may be even worse in China.

Well over 50 per cent of icewine in China is fake from what I’ve seen and heard,” said Allan Schmidt, president of Vineland Estates, which has quit the market entirely. “If it was 80 per cent … I wouldn’t be surprised.

The legitimate Chinese market for Canadian icewine has grown rapidly, which the industry attributes to a burgeoning middle class and the desire to give exotic gifts. It rose to $2.16-million in 2007 from $270,000 in 2005. The market sagged in 2008, but was worth $1.2-million in the first half of this year [2009]. It’s our most important flagship wine produced,” said Bob Keyes, vice-president of economic and government affairs with the Canadian Vintners Association.

Chilly Saga, Intense Experience

Ice wine is a very particular product. The grapes for ice wines are left on the vine long after regular grapes have been picked. By law natural ice wine in Canada can only be made from grapes that have been frozen to -7 degrees Celsius (17 degrees F) and harvested at minimum 35 degrees brix. The juice, what is left of it, is highly concentrated so each grape yields just a drop or so. Picking is done by hand, of course, since many clusters will have experienced bird damage or fallen prey to disease.

Vidal Blanc is the grape of choice for Canadian ice wine — its tough skin can stand up to harsh weather — along with lesser amounts of Riesling and other varietals. Most of Canada’s ice wine is produced in Ontario, where wine makers can pretty much count on frightfully low temperatures early in the winter season. But the first ice wines came from out west in British Columbia.

North America’s first commercial ice wine was made in 1978 by German-born Walter and Tilman Hainle of Hainle Vineyards Estate Winery in Peachland, British Columbia. Tillman Hainle, Walter’s son, generously shared precious bottles of a recent vintage from with us at the 2008 Riesling Rendezvous meetings. [See Tilman’s helpful comment below.] It was one of the most memorable wines I’ve ever tasted, so I just had to visit Hainle Vineyards on my recent Okanagan wine country expedition.

Sue and I met with Dr. Walter Huber, the proprietor of Hainle Vineyards and Deep Creek Wine Estate, who purchased the business from the Hainle family after Walter’s death.  Dr. Huber was an extremely generous host, pulling corks with almost excessive enthusiasm. He’s refuses to release his wines before their time, choosing to let them dribble out slowly to lucky wine club members. He is generous to a fault with inquisitive visitors like me, even letting us sample an ice wine from 1984. Wow! I purchased some old vine Rieslings to drink a few years from now when they have fully matured.

Only the Beginning

Ice wine is what made Canada’s reputation in wine, Dr. Huber explained, but it’s not all there is to Canadaian wine these days, especially in the Okanagan Valley in eastern B.C., where the vineyards overlook Lake Okanagan and dozens of very different micro-climates co-exist. Winegrowers are able to ripen cool climate grapes like Riesling and Pinot Noir, of course, but also Cabernet Sauvignon, Merlot, Syrah and apparently even Zinfandel!

I love ice wine, but it is only one element of Canada’s dynamic wine industry. I’ll report on the surprising wine tourism industry in my an upcoming post, followed by a peek at what might be the future of Canadian wine. O Canada, you produce some unexpected wines! Check back soon to learn about what’s happening today and what the future may hold.

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[Note: This post is part of an occasional feature on extreme wines. Extreme wines? You know, the cheapest, the most expensive; the biggest producers, the smallest; the oldest, the newest and so forth.]

Anatomy of Wine Fraud

June 21, 2010 By in wine fraud, wine markets, wine price, wine ratings, wine research 1 Comment

The crime was elegant in its simplicity: create a fake 1982 Chateau Mouton Rothschild – the 100-point wine that recently sold at auction for a record price of more than £14,000 (for a case)  according to the July 2010 issue of  Decanter.

The perpetrator used an empty bottle of the famous wine (although it would not have been that hard to fake bottle, label, etc.) and invited several wine enthusiast friends (a.k.a. the dupes) to a social  tasting where they would have an opportunity to unintentionally authenticate the DIY Mouton. (Some of the dupes unexpectedly brought along bottles of other 100-point wines from their personal cellars to share with the group. Impressive generosity! I’m sorry I called them dupes.)

The accomplice, a winemaker known for his blending skill, created the bogus vintage from an assortment of his own Washington State (!) wines from the 1990s. Some but not all of the experts took the bait — none of them suspected a fake. Wine of the night, one confidently proclaimed, even after the fraud was revealed.

The Sting

The purpose of the fraud was not, as you might expect, to make money. As reported by Lettie Teague (the perp) in the October 2008 Food & Wine article “Wine Scams: A Counterfeiter Confesses,” the idea was to see if it was possible to fool wine experts who had tasted wines like this (and even this particular wine) many times and could, presumably, easily detect a bogus wine immediately. She actually got the authentic empty Mouton bottle the hard way — by buying a full one for $1200. Not much room for illicit profit there.

Her accomplice was Chris Camarda, maker of the highly regarded Andrew Will wines. I guess it wasn’t fraud so much as a sting operation and the trap wasn’t set for Lettie’s wine expert friends (who presumably have forgiven her by now) but rather for the whole wine industry. Beware of wine fraud!

Wine Fraud: A Global Phenomenon

Old news? Hardly! My inbox has been stuffed to overflowing recently with reports of wine fraud. We seem to be Shocked! Shocked! But I wonder why? One source estimates that five percent of wines traded in the secondary market are fakes and we know that ordinary table wines aren’t always what they appear to be either. Wine fraud isn’t difficult, even at the high end. Indeed, it is remarkably simple.  No wonder there is so much of it!   And that’s the point of this post. Here are examples from the last few weeks.

  • The U.S. has just removed  restrictions on Brunello imports, finally satisfied that wine fraud issues there have been resolved.
  • The fallout continues from the French case involving large quantities of  bogus Pinot Noir sold to Gallo as the real thing.
  • Jancis Robinson’s website recently ran a multi-part report on wine fraud in China, including examples of hopelessly inept but apparently successful wine fakes. My favorite was a bottle of “Bordeaux Port” labeled “dry red wine.”
  • Newly minted Master of Wine Rys Pender’s recent Master of Wine dissertation “Counterfeit wine — its impact on the business of wine takes stock of the damage so far.
  • Slate readers were treated to Mike Steinberger’s big article on wine fraud, including the continuing saga of “the billionaire’s vinegar.”
  • And then there is the “Cellared in Canada” controversy, which doesn’t seem to have gone away — a sort of “soft-core” version of wine fraud produced by rules that permit consumers to willingly mislead themselves.

Wine fraud seems to be everywhere. What are we to make of it?

New Wine in Old Bottles

Can you spot the fake?

Well, the first thing is to realize that this is nothing new. Wine fraud is as old as wine itself, or nearly so. Pliny the Elder complained about the amount of fake wine on the market. The Roman equivalent of Petrus was everywhere, even in the humblest tavern, he said. Who can you trust?

The familiar phrase “new wine in old bottles” is, of course, a description of wine fraud. Indeed, the contemporary European idea of wine is rooted in fraud – the AOC system was provoked in part by the prevalence of fake or adulterated wines.

Then as now, fraud is easily accomplished. Why are people like Lettie Teagues’s wine expert friends so easily fooled? It is partly a matter of interests (Upton Sinclair observed that it is impossible to get people to understand something if their paychecks require them to not understand it), partly  human nature (we all like to be experts and hate to lose face) and partly a matter of Mother Nature — wine is a living, changing thing, everyone’s palate is a bit different, and even with high tech science (carbon dating?) it’s quite difficult to really know what’s in your glass and effectively impossible to know what might be inside an unopened bottle.

And some people want to be fooled in the sense that they want that seemingly impossible trophy (or unforgettable bargain) forgetting the rule that if something is too good to be true … it is probably false. As Walter Bagehot said, “At intervals, from causes which are not to the present purpose, the money from these people – the blind capital, as we call it, of the country – is particularly craving; it seeks for some one to devour it …”. And someone generally does, whether through credit fraud, wine fraud or something else.

Money, Greed and Wine

So what is to be done? The truth, I suspect, is that we must acknowledge that wine fraud is an unavoidable part of the wine world (just as financial crises are an apparently inevitable characteristic of financial markets).  When faced with fraud in other circumstances, the first thing economists do is suggest greater transparency, but there are obvious problems with this in the case of wine. The Gallo example shows us that it is possible to create impressively realistic fake documentation while the Chinese case suggests that wine is sufficiently complex that even transparently false wines with error-filled labels will fool someone.

It would be hard to make wine more transparent in any case because some of the people with the most at stake would probably be the first to resist it. Suggestions that wine labels should include normal consumer information like you find on boxes of breakfast cereal inevitably produce a harsh reaction. Wine is above such detailed accounting (and accountability), apparently. It is as if revealing what is actually in the bottle would somehow let the genie out of it. Consumers aren’t just buying wine, they are buying mystique and lack of transparency is part of the deal. And so, I suspect, is fraud.

While I applaud efforts to punish offenders, I think we must admit that the combination of economic interests, human nature and Mother Nature will make it impossible to eliminate wine fraud. Trophy wine fakes will get all attention, no doubt, but I think that the possibility of fraud in ordinary table wine is the bigger concern — another indication of my strong Wagnerian leanings.

Chapter 4: Crisis

“At intervals, from causes which are not to the present purpose, the money from these people – the blind capital, as we call it, of the country – is particularly craving; it seeks for some one to devour it, and there is a ‘plethora’; it finds some one, and these is ‘speculation’; it is devoured, and there is ‘panic’.”