eBay: empty wine bottles sales & fake premium wines?

gromgull

One of the most thought-provoking papers at this year’s meeting of the American Association of Wine Economics was presented by Günter Schamel, a professor at the Free University of Bolzano.

Schamel’s study, which is still in progress, has thus far looked at a data set of 260 eBay auctions of empty wine bottles. In his model, the most powerful predictive variable — explaining both the incidence of sale and the final auction price of an empty bottle — is “the price a full and presumably authentic bottle could potentially fetch in the marketplace.”

Schamel argues that this is “powerful evidence that the empty bottles might go on to be refilled. Why otherwise would someone want to pay more than 100 euros for an empty bottle of 1982 Chateau Lafite-Rothschild rated with 100 Parker points? Presumably, because it is worth a lot more once it is filled up again.”

Certainly, notwithstanding a recent incident in which a customer at a London restaurant sent back a £18,000 magnum of 1961 Château Pétrus claiming that it was counterfeit, our wine experiments and others’ predict that few consumers — even wine experts — would be able to identify a plausible fake of ’82 Lafite.

In my mind, the strongest piece of evidence in favor of Schamel’s theory is that his model shows no price effect for the most intuitively collectible of all wine bottles — Château Mouton-Rothschild bottles with artist labels. These are designed by a different prominent artist for each vintage. One might assume that these bottles, when empty — since they’re limited-edition works of art — would have higher value than others if they were being collected for legitimate purposes.

On the other hand, if collecting empty wine bottles is less like art collecting and more like straightforward conspicuous-consumption plumage — that is, if, say, a collector’s display of a row of empty bottles in his or her dining room or wine cellar is functioning as a mere social display of the total value of all the expensive wines that he or she has consumed — then he or she would have an interest in buying the most expensive possible bottles, which would explain the model’s results without the need for counterfeiting. It would be interesting to survey empty-bottle collectors to see, at least anecdotally, what qualities they claim to value most. [I'm thinking of the counter-intuitive (or is it  abhorrent?) behavior in some third world countries of lining up rows of old dead autos or household appliances on their residential properties as monuments to a past ability to purchase luxury items...]

It was also brought up in the Q&A session that, to complete his or her work, a counterfeiter would also need an appropriate cork. As few corks are available on eBay, Schamel has not yet investigated a potential cork effect. However — and this is speculation — I would imagine there to still be a robust market amongst counterfeiters for empty bottles without corks, primarily because I’d assume that there is also a separate black market for counterfeit corks (or real corks without bottles) that could complete the sets, so to speak.

I’d also assume that one of the main categories of counterfeit-wine buyers would be conniving restaurateurs in regions where there’s a lot of demand for prestige bottles but relatively little wine tradition or wine education; China and Russia come to mind. I’ve seen a table full of businessmen in Hong Kong order a bottle of 1970 Haut-Brion and mix it with Coca-Cola. Restaurant customers in such situations would be easily duped — and they also might be less vigilant about looking at the cork. Such restaurateurs might take steps, for instance, to avoid presentation of the cork when the bottle is opened.

I’ll leave it at this: if I were going to go into the wine counterfeiting business, eBay would certainly be one place I’d start.

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Counterfeits and Other Problems

Some experts estimate that as much as 5% of the fine wine secondary market involves fake wines. From grape juice shipped across boarders to acquire a famous region’s kudos, to clean-skins labeled with illustrious names and ancient vintages – the full range of trickery occurs on a regular basis.

There is no substitute for having direct experience of genuine examples. People who handle wines on a daily basis quickly acquire an instinct for spotting counterfeit wines. So keep your old bottles and build up a collection in order to compare with more recent purchases.

Features to look for:

The Bottle

Glass making has changed considerably since the bottling of famous vintages prior to 1982.

Capsules

These should be consistent with other known examples of the vintage; though there are a few rare examples of Chateaux using more than one capsule type for a vintage.

Corks

Chateau bottled wines have the correct vintage and brand labels on the cork. Before 1970 wine was often shipped in casks to wine merchants who bottled the wine themselves (leading to labeling such as “Belgium bottled”, “Berry Bros bottled”, etc., on some old wines).

Re-Corking

There was a tradition of re-corking wines, and refilling the bottle where levels were low. Penfolds seems to be the only company still doing this. Serena Sutcliffe (of Sotheby’s) for example is “against recorking of wines, even if old, as the shock is great and fraud made more easy by the practice”.

Labels

For old wines some label damage is to be expected, and perfect condition is a sign of possible fraud and/or storage in too dry conditions. Wine stored within the correct humidity range can naturally lead to some label staining. It is common for fraudsters to get the labels almost, but not quite, right. Check for spelling errors, font changes, etc.

Provenance

Wines that have been traded many times, or where there is vagueness about the ownership trail are clearly more open to fraud. At the other end of the market there are wines that have been cellared at the Chateau since bottling. These, rightly, command a premium in the market.

US Strip Labels

Wines imported into the USA must have a USA strip label on the bottle stating the importer’s name. A wine with a USA strip label is virtually impossible to sell outside the USA.

Generally, be wary of wines that look too good for their age, labels too perfect, or fill levels too high. Take care who you buy from and avoid any wine merchant who cold calls you.  For further advice please consult Wine Authentication Services LLC which is based in Brookline MA.   Bay Country Liquors has a detailed page showing examples of fakes they have been offered in the past.

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