Making sense of wine fraud

How did we get to the point where con artists are faking Yellow Tail to turn a profit?

The Wine Curmudgeon, despite his newspaper reporter’s cynicism and the idea that nothing in wine can surprise me any more, must admit: I still can’t make any sense out of wine fraud.

I mention this because wine fraud has been roiling up the cyber-ether this summer, and especially over the past several weeks. Someone was even faking Yellow Tail in Britain – yes, $6 Yellow Tail. Meanwhile, the Lidl grocery chain — which should know better – got burned with fake Spanish wine.

So my question: Aren’t there easier ways to cheat people and to make more money in the process? Who’s going to make millions and millions with a wine fraud? Which, of course, is what happens with those old standbys, stock and real estate frauds. And if you want to be colorful and still clean up, you can always use fake race horses.

Nevertheless, wine fraud seems to be as much as part of the business as scores and premiumization. So what’s going on?

• Snobbery, of course. Most of the high-end swindles in wine have focused on rare wines, because every old rich guy wants to own rare wine. Whether it’s real or not is just a minor inconvenience.

• Wine as an investment. This shows how much wine has changed and is sadly pathetic. Con artists bilked 150 people, mostly older, out of $13 million by promising high returns on investments in rare wine and whiskey. If only they had wanted to buy wine to drink. Note that this is actually a stock fraud; hence the big payoff.

• Too much wine in the world. There have been a variety of frauds focusing on supermarket wine, which usually wouldn’t afford enough margin to be worthwhile. But given the wine glut in Europe and Australia, one can take bulk wine, slap a supermarket label on it, and turn a profit.

• China. Trying to understand wine fraud in China is like trying to understand cricket. Good luck unless you grew up with it.

• Taxes, and especially in Europe. Tax evasion in parts of Europe is as much a pastime as football; the only thing missing is a World Cup. So when you see a story that says someone counterfeited wine for no apparent reason, chances are it was to get around the tax police.