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W i n e s & V i n e s A U G U s T 2 0 1 4 41 How much do consumers know? According to the Interna- tional Center for Alcohol Policies, 30% of alcohol consumed worldwide is illicit, and experts from Wine Spectator estimate that 20% of the wine consumed world- wide is counterfeit. Anti-counterfeit lawyer Nick Bartman once estimated that approximately 70% of the "imported" wine he saw in China was fake. By comparing production in France and re- tail sales in China, enologist Frankie Zhao agrees that 70% of Château Lafite Rothschild bottles sold in China are fake. According to Wine Intelli- gence, 44% of Chinese con- sumers do not know whether or not the wine they are drink- ing is authentic. This factor significantly undermines con- sumption of the most presti- gious imported wines and represents a strong barrier to purchase. Counterfeit wine in the United States Credible statistics about counterfeit wines are rare, but a handful of studies paint a clearer and more credible picture of counterfeiting across the globe. A research study conducted by Marco Turchini (then researcher at the University of Florence in Italy) high- lighted the significance of the impact of counterfeiting on local production. According to Turchini's research, the loss of revenue associated with counterfeit Italian wines is approximately 2 billion euros ($2.7 billion) per year, and the primary international market targeted by this traffic is the United States. Turchini explains that U.S. consumers lead Italian wine consumption in terms of value, and prices for Italian wine are quite high in the United States, where demand exceeds supply. This encourages the trade in counterfeit wines, which are sold for lower prices, the researcher says. In the United States there is an important kind of brand counterfeiting that does not involve copying a well-known brand, but rather creating a false brand under an Italian- controlled designation of ori- gin and guarantee (DOCG) such as Brunello. The counter- feiting of Italian brands target- ing the United States come mainly from Europe, Asia and Latin America. To a lesser ex- tent, the United States also is reported to shelter the coun- terfeiting of local Italian wines and/or Italian-related wines. In another incident of do- mestic counterfeiting, a signifi- cant spirit bottle-refilling operation was dismantled in New Jersey in May 2013. The New Jersey Division of Alco- holic Beverage Control discov- ered during "Operation Swill" that 29 establishments in the region set up a fraudulent sys- tem of refilling empty, high- quality spirits bottles with lower-grade alcohols, which they then resold to customers at the original prices. The role of the Internet Unlike in the pharmaceutical industry, there are no global statistics on the sale of coun- terfeit or illegal wine over the Internet. A study by Günter Schamel, an Italian researcher at the American Association of Wine Economics, high- lighted the significance of the trade in empty wine bottles on eBay. Generally speaking, illegal trade follows market trends, and the trade of empty Bordeaux Grand Cru bottles rocketed in 2009-10, the years covered by the study. Some legal specialists in wine believe there is little incentive to make good counterfeit Bordeaux vintages visible on the Internet, since the use of discreet physical networks for distribution are lucrative. Yet many observers have a ten- dency to underestimate the im- portance of the web in China. • Precise Post-Botling Oxygen Control • Enhanced Aromatcs • Chlorine & TCA Free • 100% Recyclable • Short Lead Times • No Minimums • Complete Customizaton • Laser-Etched Cap-Tops • Embossed Cap-Tops • Top and Side Printng • Custom Color Matching p 707.252.2155 f 707.252.2166 vinperfect.com 831 Latour Court, Suite B1 Napa, CA 94558 WINE'S FIRST PERFECT CLOSURE facebook.com/vinperfect Call our sales team or request a quote online. Make the switch to VinPerfect Screwcaps and gain a closure partner for life. www.vinperfect.com/order Choose the VinPerfect SmartCap for your next botling and taste the difference with precise post-botling oxygen control. ORDER TODAY sales@vinperfect.com 707-252-2155 WINE'S FIRST PERFECT CLOSURE TM t e c h n o l o g y