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Phony Wines, Eager Buyers and Nervous Vintners

By Sarah DiLorenzo

SAINT-EMILION, France -- An FBI agent recently showed Arnaud de Laforcade a file with several labels supposedly from 1947 bottles of Chateau Cheval Blanc, one of France's finest wines. To the Saint-Emilion vineyard's CFO, they were clearly fakes -- too new looking, not on the right kind of paper.

But customers may be more easily duped.

Regardless of his skill, the counterfeiter had ambition: 1947 is widely considered an exceptionally good year, and Cheval Blanc's production that year has been called the greatest Bordeaux ever. The current average price paid for a bottle at auction is about $11,500, according to truebottle.com, which tracks auctions and helps consumers spot fakes.

Counterfeiting has likely dogged wine as long as it has been produced. In the 18th century, King Louis XV ordered the makers of Cotes du Rhone to brand their barrels with "CDR" before export to prevent fraud.

But wine fakers are getting more sophisticated and more ambitious, particularly as bottle prices rise due to huge demand in new markets, mainly in Asia. After decades of silence, producers across the $217-billion industry are finally beginning to talk about the problem and ways to combat it.

The astronomical prices paid for fine wine these days makes the bottles "more than just a luxury item," said Spiros Malandrakis, senior analyst of the alcoholic drinks market at Euromonitor, a research firm. "They become a currency in themselves. And as with every currency, at some point, people want to find ways to manipulate that and make more money."

Sizing Up the Problem

Experts say it's impossible to know the size of the counterfeit market. Partially that's because many sales happen privately and because the wine market is legal, unlike, say, cocaine trafficking. Many known counterfeits likely go unreported because the victims are embarrassed -- and chagrined to lose their investment. Industry insiders, meanwhile, have long ignored the problem collectively as producers were afraid of scaring customers.

But many experts agree on one point: the quantity of rare bottles from illustrious vineyards being auctioned is just too high to not include fakes.

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