Gazette - Fighting against wine counterfeiters

COVER SECTION

Industry techniques empower consumers

Fraudulent products not only fund criminal organizations, they also diminish genuine manufacturers’ credibility in the eyes of consumers who mistake counterfeits for the real thing. Wine manufacturers have been victimized by counterfeiters for years, but they are now fighting back, using a leading-edge product authentication process developed by the Swiss company Algoril. Algoril’s sales director Olivier Gudet describes how the process targets counterfeiting from the ground level.

By Olivier Gudet
Sales Director, Algoril

The globalization of trade activity is good news for counterfeiters. As product manufacturers expand their geographic markets, many products are finding their way into the hands of groups that “specialize” in creating knock-offs. The challenge for manufacturers is to find easy and efficient tools to not only deter counterfeiters, but also detect fakes from the get-go.

Many solutions in the wine and other industries rely on invisible techniques — for instance using special paper or ink as is the case with banknotes. These techniques have become outmoded, costly and difficult to implement because they require the use of special scanners or detectors. Such latent solutions in no way reassure consumers, who often do not even know the measures exist.

The anti-counterfeiting solution being marketed by Algoril for the wine industry is simple and effective: for every bottle of wine produced, Algoril creates a unique ID code which essentially becomes the bottle’s fingerprint.

Protecting authentic products

Each Algoril ID code is generated by combining information about a wine’s unique characteristics — producer, appellation, vintage and serial number — with an encryption algorithm. The ID code is usually printed manually on the bottle’s back label and the associated product information is stored in a highly secure database maintained by Algoril. It is possible to place a second code into a matrix that could be scanned or captured by a cell phone camera.

Consumers can then verify a product’s authenticity by submitting a verification query via either the Algoril website or a cell phone text messaging service. Data contained in the Algoril database is compared with the information printed on the product, as submitted by the consumer. This cross-checking of information makes it possible to detect several types of fraud such as parallel market fraud or counterfeiting.

For producers, the coding technique supports “business as usual,” since the coded labels are delivered ready for application. The cost is minimal, thanks to printing devices that can produce different sorts of labels without compromising print quality or output.

And consumers can access product information anytime from almost anywhere — which is a big plus compared to current anti-counterfeiting measures that sometimes require waiting for the producer or a specialized device to confirm fraudulent activity.

Detecting knock-offs

You will know that your bottle is a fake if you submit a verification query and your bottle ID code is not registered or does not match product information in the Algoril database.

Another sure sign of fraud is if several verification queries are received for the same bottle, which usually means that a counterfeiter has “cloned” one or several codes. In cases such as these, it is possible to track exactly where the original bottle was purchased using traceability data provided by the manufacturer for each batch made available for sale. These data include information about the production of the wine as well as shipping details, such as country of destination, the importer, the exporter and finally the retailer.

By cross-checking the traceability data against the information in the original verification query, we can also identify parallel markets and determine if a given batch has been diverted from its original destination. If the information does not match, the system generates an alert and sends an e-mail to the producer. In such a case, the producer must control each link in the distribution chain to identify who is behind the diversion.

Consumer participation required

The success of Algoril’s anti-counterfeiting measures will depend on the extent to which consumers are encouraged to use ID codes to obtain information. Initially, a customer in a wine retail outlet has the opportunity to make sure a product is authentic before making the purchase. Checking a code also provides consumers with a range of other useful information regarding the specific bottle of wine — for instance ideal temperature for serving, what food to serve it with, etc.

These consumer queries constitute the anti-counterfeiting system’s advanced radar. There is no need for overly sophisticated means to identify knock-offs, since fraudulent activity is detected either directly or indirectly by the actions of consumers.

The extent of information provided for viewing depends on who is querying the system, since end buyers and industry authorities do not require the same details. For instance, information for the end consumer will focus on the “value” of the product whereas information for the autorités sanitaires will be oriented more on content composition and consumption date.

Each requester, if identified, will receive information formatted for their own use.

Looking to the future

Most of the media hype surrounding counterfeiting operations is due to knock-off batches of well-known wines being sold at auction. Unfortunately, not much can be done about bottles that are already in circulation and do not have ID codes. To check the authenticity of such products, you must open the bottles to taste or test the wine, and that is problematic because doing so permanently spoils the wine. Even if you test just one bottle in a batch, there is no guarantee that the rest of the bottles are authentic.

Seals made with safe paper can be used to protect bottles against tampering, but this is still not a foolproof solution. In one case, counterfeiters made a hole in the bottom of a bottle, emptied the contents, refilled the bottle with another wine and filled the hole in with acrylic glue. To the naked eye, it was impossible to detect any form of tampering. Even if the bottle had been sealed, the seal would still be intact.

Nowadays, the only true deterrent is to ensure reliable traceability from start to finish. Upon detecting any form of fraudulent activity, Algoril will conduct an investigation to determine the exact stage of the logistics chain where the illicit intervention occurred.

Action has to be taken at the source — by producers. Consumers must then be encouraged to take advantage of the anti-counterfeiting measures made available to them in order to help put an end to counterfeiting activities.