Counterfeit Whiskey Is On The Rise Everywhere. What Can You Do About It?
By Richard Thomas
In April 2017, a case of fraudulent activity in the UK came to light that would be laughable, were it not part of a larger and more serious trend. Tofikuddin Ovaysi, a scammer who has claimed to be a Russian national and the son of former United Spirits chairman Vijay Mallya, set up nearly 100 shell companies using names like which Brown-Forman Corporation (Spirits), Irish Distillers Pernod Ricard Ltd and Balvenie Distillery – William Grant&Sons Ltd. Most laughable of all these phony companies was Chivas Sisters.
What Mr. Ovaysi intended to do with all of these dubious company registrations is unclear, but what is clear was his intention to create bogus companies with names that looked like divisions of real distilleries and drinks companies. Ovaysi could have been planning to use whiskey’s international popularity to entice the unwary into investment scams. While that is of little concern to consumers, most whiskey scams involve counterfeit bottles, and that should concern consumers greatly.
What Is Really In That Bottle?
In 2015, New Dehli police exposed a ring that was passing off Indian Made Foreign Liquor, a blanket term for any alcoholic spirit made in India that isn’t indigenous, as genuine Scotch whisky. Most likely this was the ersatz Indian whisky that dominates the domestic market there, which is made by mixing a small proportion of malt and/or grain whisky with a rum-like spirit made from molasses.
This domestic ersatz Indian whisky was put into empty, used bottles of Chivas Regal, Johnnie Walker, Glenfiddich and Glenlivet, among others, which were then topped with new stoppers and caps imported from China. The phony Scotch was sold to retailers, who passed it on to unknowing consumers as the genuine article.
India isn’t the only country with a fake booze problem. China is rampant with counterfeit whiskeys and other spirits, so much so that Brown-Forman estimates 30% of the liquor sold in China is phony. It was only in 2013 that China saw its first criminal conviction in a phony whisky case.
Fraudulent whiskeys are actually fairly commonplace around the world. Although few countries have crooks approaching the brazenness of those in China and India, where some gang or another producing copies of major brands are a regular occurrence, knock-offs appear around the world. Liquor products with race horses and kilted Scotsmen on the label, pretending to be Kentucky bourbon and Scotch whisky (albeit not a particular brand), pop up everywhere from Argentina to Vietnam.
Fakes have also been appearing in the market for high end bottles. Whisky Auction discovered that a number of fakes had been submitted to them, mixed in lots with genuine articles, leading them to tip off London police. This led to the arrest of a 41 year old man in February. According to Whisky Auction, the forgeries were of a high quality, and what initially tipped them off was the sheer quantity of whiskies involved, since so many were unlikely to be available. In short, the counterfeiter was greedy and overreached, but it’s sobering to think what might have transpired had he been more prudent.
Similarly, the fame and high prices commanded by Pappy Van Winkle bourbons have led to a raft of counterfeits appearing on the market. This trade in phony Pappy is aided by the fact that most of the transactions take place on the so-called “secondary market,” which is to say informal and illegal transactions that often occur via the internet. A clue to the extent of the trade in counterfeit Van Winkle is the price an empty bottle can fetch, anywhere from $30 to $300. Consumers seeking rare bottles of Scotch whisky through informal dealers, those not associated with a brick and mortar retail or auction establishment, have faced similar problems for years.
Frauds such as these are familiar in the West’s high end booze markets, having appeared on the auction blocks for pricey wine long before the notorious Hardy Rodenstock began running the giant scams that were detailed in The Billionaire’s Vinegar.
Protecting Yourself From Whiskey Fraud
Identifying a fake can be difficult. If you are an expat in China and bought a bottle of phony Glenfiddich, the bottle itself is probably genuine, as the aforementioned Indian case indicates. Identifying counterfeit rarities is easier precisely because they are supposed to be rarities, but oftentimes you can’t begin to look for the telltale signs of fraud until you actually have the bottle in hand.
One certain rule for avoiding counterfeits is to deal with reputable sellers. Whisky Auction, for example, could have turned a blind eye to that suspiciously large number of bottles and collected their commission, but they didn’t. By contrast, the American secondary market is by definition illegal, and those who trade on an unaccountable black market have only themselves to blame when they get snookered.
As for phonies in places like India and China, the concern over these should be more serious for travelers and expats. Just like in Prohibition America, the criminals who make that hooch aren’t necessarily concerned with the health and welfare of the consumer, and poisonings involving counterfeit whiskies happen. If you are concerned about the provenance of a bottle of Jim Beam or Johnnie Walker in Shanghai, shop at an international chain supermarket and drink in chain hotel bars. The supply chain mandated by their corporations should keep fakes off their shelves.