How to spot fake bourbon? The question reveals an endemic problem affecting the biggest brands in the whiskey industry. Brands need to explore next-generation technology solutions to take back control from counterfeiters.
The global whiskey market is expected to generate close to $81.2 billion by the end of 2022. With the demand for premium whiskey like Kentucky bourbon expected to grow, the rising problem of counterfeiting will only worsen in the coming years.
Fake bourbon is a genuine issue facing the multi-billion dollar industry. Some reports claim as many as 33% of premium whiskey currently in circulation could be fake.
The influx of investors, enthusiasts, and amateurs alike has further incentivized the production and sale of illicit bourbon, through both online and offline channels. The most premium whiskeys stand to fetch more than a million pounds at auctions, luring counterfeiters to try their hand at duping buyers.
In the wake of financial, health, and environmental risks posed by fake bourbon, are brands doing enough to protect their premium products? And what does modern technology offer manufacturers trying to educate consumers on how to spot fake bourbon?
Bourbon Counterfeiting Isn’t New
Fake whiskey and bourbon started to appear in volume in several auctions during the ‘90s. The problem became more prevalent as the market for older and hence, pricier whiskey started growing. Some distilleries, either intentionally or not, became a party to the problem by acquiring and selling fake bottles at a premium.
In the recent past, the rapid arrival of new-age investors and whiskey enthusiasts on the scene has added to the growth. A huge majority of the new generation of consumers is less concerned about the purity of the bourbon they buy than uploading a picture on social media, according to Adam Herz, a whiskey collector and producer of the ‘American Pie’ franchise.
Malicious agents have quickly caught on to this potent mix of skyrocketing demand, limited supply, and a vast market of naive buyers.
In fact, David Robertson, co-founder of Rare Whiskey 101, a whiskey brokerage and valuation service comments:
“It is our genuine belief that every purported pre-1900 – and in many cases much later – bottle should be assumed fake until proven genuine, certainly if the bottle claims to be a single malt Scotch whisky.”
No Brand is Immune To Fakes
Rare American bourbon brands like Colonel E.H. Taylor and Pappy Van Winkle are most susceptible to counterfeiting as forgeries crop up on newer channels like online websites and social media groups.
Where are Counterfeits Found?
Whiskey counterfeiting is primarily of two types — one, where low-cost and sub-standard products are manufactured and passed off as originals, and the other, where authentic bottles are refilled with a lesser quality product. The latter is getting increasingly difficult to track, even for some of the oldest and most prominent names in the business.
Affected Brands and Important Counterfeit Cases
Take the case of New York’s Acker Wines, one of America’s oldest wine stores. An investigative team from Inside Edition found one of their Colonel E.H. Taylor Four Grain Bourbon bottles to be fake. During the purchase, the team even asked the store about the missing lot code and special packaging of the bottle, to which they simply replied that the bottle was ‘fine’.
Another prominent case of counterfeit bourbon came to light in 2016 when Rare Whiskey 101 uncovered fake bottles of Laphroaig and Macallan worth over a million pounds, using carbon dating. Fashioned as belonging to the early 20th century, the whiskey inside the bottles was found to be brewed somewhere between 2007 and 2009.
The Far-Reaching Dangers of Fake Bourbon
Illicit and counterfeit bourbon poses many risks to brands, consumers, society, and the environment.
First, it’s a big hit to authorized sales and profits for the manufacturers as fake bourbon acts as a direct competitor. The revenue leakage also reduces the incentive for the brands to invest in R&D and innovative manufacturing processes. And lastly, the brand name and reputation take a hit as consumers unknowingly buy a fake alternative and go through an inferior experience.
Second, illicit liquor poses health and safety risks to consumers. In 2015, 8 people in Siberia died after consuming fake Jack Daniels whiskey they bought from an online seller. In 2019, 3 people in Zimbabwe died from fake Jameson Irish Whiskey.
Third, manufacturers are forced to curtail operations due to the unfair competition from fake whiskey. As a result, countless jobs are lost and the brand suffers both financially and reputationally. Another downside of illicit whiskey is that millions in taxpayer money don’t reach the authorities.
And fourth, these illegally produced products pose environmental risks as they do not follow local and international guidelines intended to limit emissions.
What Are Brands Doing to Tackle Fake Bourbon?
Not all is doom and gloom in the premium whiskey market. Brands have started to act by adopting a variety of ways to equip users with the ability to distinguish fake products from real ones.
Some brands add a family crest impression on the bottle seals to help consumers spot their genuine products. Others use additions like unique barcodes, duty stamps, and holograms to offer some level of protection from counterfeiting. Still, other products like the 23-year-old Pappy Van Winkle use laser codes to fill the bottles to a very specific level that’s unique to the specific product line.
An additional layer of fraud protection can be achieved with QR codes on the packaging. Consumers can scan these codes and verify the authenticity of the bottle. A more expensive implementation would be with the use of RFID tags, NFC tags, and blockchain-based solutions in the form of NFTs. RFID and NFC tags can help create tamper-proof packaging and NFTs can capture a unique digital signature of a bottle.
These solutions, although promising, have been adopted only by a handful of brands. Many distilleries still use common shrink-wrap seals in their packaging which can be easily faked.
How to Spot Fake Bourbon – Next Gen Solutions
Counterfeiters are quick to capitalize on any opportunity to forge premium bourbon. In the absence of high-tech solutions, brands really don’t stand a chance. This is because overt solutions like QR codes and other unique markings can easily be replicated.
Hence, brands need to invest in covert solutions that are much harder to replicate and are thus, not worth the time to counterfeiters.
Types of Product Verification
There are two levels at which brands can implement covert protection solutions:
- Verification by brand experts: With the help of totally covert solutions, brands can implement undetectable protection methods. For example, a Cryptoglyph on the bottle or the label, or a digital fingerprint on the plastic enclosure. This is important as wines and whiskeys stay in circulation for decades.
- Verification by consumers: Verification by consumers still remains important for marketing and also the knowledge of consumers. Brands can repurpose a visible element like QR codes or stickers into a marketing tool. The consumer can verify the overt solution while the actual undetectable verification with a Cryptoglyph can happen in the background.
Combining Overt and Covert for the Perfect Solution
The best anti-counterfeiting measures are a combination of overt and covert solutions. Overt solutions like a QR code or a hologram can be easily faked. Even covert solutions, when used alone, can lead to consumers favoring a fake alternative over the genuine one simply because it has an overt protection feature that was never part of the genuine packaging.
The only viable solution is to combine the covert and overt solutions to protect a product as precious as bourbons. As a result, the consumers will be able to verify the product with visible protection. On the other hand, over decades, the covert solutions will remain a measure to verify the pricier bottles.
With AlpVision’s innovative, high-tech, and tailored solutions, brands finally have robust ways to fight fake bourbon without major modifications to their packaging or production processes.
- Cryptoglyph embeds thousands of invisible micro-holes in the bottle packaging labels and can be authenticated by end-users easily with a smartphone app.
- Secured QR code augments standard QR codes with invisible micro-holes in the black part of the QR code and is easily detectable with a smartphone app.
- AlpVision Fingerprint is AlpVision’s patented security technology to secure product parts that are molded or stamped, such as bottle caps and plastic bottles. AlpVision Fingerprint lets you protect thousands of products with a single reference image, allowing scale production. A smartphone can easily detect and authenticate the product.
- A QR code can be secured by simply applying Cryptoglyph on top of it. Choosing between Cryptoglyph and Secured QR Code depends on the specific use case of a brand and the product line.
The undetectable protection of Cryptoglyph and the tangible promise of a QR code can enable your product to benefit from the best of both worlds.
Protect Your Brand from Fake Bourbon with AlpVision
Effective protection against counterfeit bourbon and whiskey involves both implementing innovative and tamper-proof solutions and making consumers aware of the same. It’s not an overnight process but your brand can take the first step today.
As a starting point, you can target the most problematic markets—authentic bottles refilled with cheap whiskey—first and focus on verification by brand experts. This would allow for faster implementation thanks to the Brand Monitoring System (BMS) combined with Cryptoglyph. The system can later be implemented widely for verification by consumers.
Contact us today to commit to patented and innovative anti-counterfeiting protection that actually works.Contact us