Collectibles Sub-Market - Wine Fraud Rate
This brief presents an estimate of the most recent fraud rate for the global collectible wine market in the fourth row of column C of this spreadsheet. To put the estimate into context, this brief starts with an overview of the types of wine fraud, proceeds to address the enabling factors of fraud in the wine industry, and then closes with the fraud rate for collectible wines as presented in the accompanying spreadsheet.
Types of wine fraud
Wine fraud essentially falls under three categories. The first is wine adulteration, which involves the dilution of wines with "water, juice, sweeteners," or other inferior products. Next we have wine label forgery which targets "inexperienced buyers" who assess the authenticity of wines using bottle labels. Finally, wine investment industry fraud is perpetrated against "select collectible buyers" at "high-end auctions" using the first two types of wine fraud.
Enabling factors of fraud in the wine industry
The rising cases of wine fraud have been attributed to the increased usage of the 100-point wine rating scale by wine critics. The system is used to rate wines on the following factors:
Secondly, the proliferation of "wine auctions" has provided fertile ground for fraudsters. Online auctions in particular allow fraudsters to operate anonymously worldwide. Finally, another factor that has fostered wine fraud is the removal of import duties in certain parts of the world such as in Hong Kong.
The fraud rate for the global collectible wine market
According to 2017 presentations by Maureen Downey, a globally recognized authority on wine fraud, who is also the founder of WineFraud.com, a unique online wine education and authentication platform, approximately "20% of all fine wine traded is counterfeit." The Knight Frank Luxury Investment Index highlighted that by 2017, fine wines had become the "top performing collectible," justifying the use of fine wine statistics to address the fraud rate for the global collectible wine market required for this brief.
Furthermore, Maureen Downey's extensive experience in "fine wine authentication," together with her work with the United States Department of Justice and Federal Bureau of Investigations on several cases of wine fraud, makes her estimates credible. She has shared her wine authentication expertise in worldwide forums in London, Hong Kong and Australia.
The fraud rate for the global collectible wine market was estimated to be around 20% in 2017. Factors enabling this fraud include the 100-point wine rating system, more wine auctions and the removal of import duties in certain regions.