Are Empty Wine Bottles on eBay Being Used for Counterfeiting?

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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.

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.


uva par vino

Here's another explanation.
When I graduated high school, my uncle, a wine collector, gave me a bottle of 1982 Cheval Blanc. I had no idea what it meant at the time, and drank it, sans glassware, with the help of a swiss army knife and a few buddies.
Later, as I came to realize what I had done, I was mortified. I scoured the web for some time until I found an empty. Now, if my uncle asks about the '82, I'll tell him I drank it on my wedding night, show him the empty, and no one will be the wiser.

Eric M. Jones

Ebay has about a zillion things they don't allow. I'm sure empty of full wine bottles will be on their prohibited list soon.

michaelt

The telling statement in one of the previous posts is, "eBay not willing to do much about it".

My experience in buying and selling using eBay is that clever sellers who are highly familiar with the eBay terms & conditions can - and do - easily and regularly exploit the loopholes in the terms. I purchased a ceramic plate from a seller in France - and the extra insurance he offered.

The plate arrived broken in dozens of pieces, and had been packed extremely poorly.

What a sham! The seller managed to stretch out the "I am submitting a claim to my post office" period to the point that eBay would not accept any feedback from me.

Caveat emptor!

James

I think Prof. Schamel doesn't understand the psychology of wine enthusiasts. The cachet associated with 1982 Chateau Lafite-Rothschild is such that to an obsessive oenophile, an empty bottle is easily worth 100 euros (especially when a full bottle auctions for well over 10 times that). If any fraud is going on, it's when the guy who buys that bottle shows it to his wine buddies to impress them and misrepresents that he actually got to drink it. The correlation between price of empty and full is a natural side-effect of the cachet increasing as the price increases (the relationship to scarcity is questionable, because many of the expensive Bordeaux are produced in rather high quantities).

Leslie

Someone told me that wine is only valuable when unopened. If you drink it, it is worthless. So, you may not know if it is fake unless you were to open it, thus making is worthess anyway.

Ronald Stone

Is there more than one Ebay? Because the Ebay I visit has 571 different listings for unopened bottles of wine for sale. I didn't look at them all but the ones I did look at are clearly for the consumption of the fluid inside. They do make it clear where they can and can not ship the wine to.

RonX

Walter Pemican

I think Sam Carter (#5) above has the simplest explanation.

There is a similar issue with rare maps. Most 17th-century maps were sold in complete atlases. Generally these atlases have been broken up and sold as individual maps.

It used to be that that title pages of these atlases were pretty much worthless as nobody really cared about them - people were more interested in the maps themselves.

Nowadays there is some (not great) interest in the title pages also, and those from rarer atlases command higher prices.

nf

Nothing new here. I've known bars that routinely refill empty bottles of Johnny Walker with cheap scotch.

sysadmn

Eric M. Jones: If you believe eBay will promptly ban wine bottle sales, you haven't used it extensively lately. eBay acts when eBay's interests are affected. For example, the bans on alcohol, ammunition, and lock picks are in place since it is theoretically illegal for an individual to sell/ship them. eBay has become a snakepit - fraud by buyers against sellers runs rampant, but eBay doesn't act since they still collect the listing fee, and for the most part, sellers don't have a competing agora.

Economists Do It With Models

I am a grad student in economics, and one of my classmates pointed out to me that the best reason nowadays to examine the cork of a wine is to see if it's consistent with the bottle and the label, since it's easier to counterfeit a label than a cork. I would still prefer the cork to not be bone dry, but he does raise a good point.

Bobby G

Good luck trying to get eBay to do anything to dissuade shoplifters from using their service to easily and cheaply sell their shoplifted goods, either.

and by

Who knew Sammy Hagar was a wine expert.
He has apparently been ripped off by fake wine.

http://www.laweekly.com/2007-11-22/news/fabulous-fake-wine/

Dustin

Isn't the obvious answer to find the buyers and investigate them. Or to sale bottles on ebay and then track them back to the buyer and see if he is in the wine business. Its a shame that more products don't come in glass.

Gary

There was a great piece in the New Yorker a couple years back about Hardy Rodenstock, who (at the time anyway) was suspected to have passed off counterfeit bottles of wine for 6 figure sums.

I believe I've read in the past that its not uncommon for older vintages to be recorked to prevent the wine from being tainted by an old cork which is breaking down... so there's an argument to be made that a non-matching cork may not indicate foul play. Then again, walks like a duck, talks like a duck...

The article is still up here: http://www.newyorker.com/reporting/2007/09/03/070903fa_fact_keefe?currentPage=1

rw

Good job Chris, I'm surprised it took until #19 for anyone to make the connection to empty bottles and 'fake wine'.

The Billionaire's Vinegar is a pretty decent read, it was the very first thing I thought of when I opened this link!

Ed

eBay also prohibits the sale of empty watch boxes, supposedly to deter the sale of counterfeits.

Gerald

Does this suggest that wine pricing is almost like the diamond market where prices are artificially raised--sans oligopolies in this case? I guess I'm not really saying it is--but maybe just an observation that high-end luxurious items tend to be inflated based on perceptions involved.

Matthew

Did nobody ever watch Northern Exposure? In "The Big Feast" Eve fakes a $1,000 bottle of wine to replace a broken bottle.

The great thing for the counterfeitors is that there is not much overlap between the list of people who could differentiate a $1,000 bottle of wine and a $200 bottle and are interested in actually buying one. Further, many of the people ready to waste that kind of money to impress someone certainly aren't going to admit to anyone that they were scammed.

Gregory Dal Piaz

I have no doubt that many if not most of the truly rare bottles we see in these auctions eventually find their way back into the market, refilled and ready to be resold. I have purchased several counterfeit bottles over the years with just a little more work each one could have been passed off as a cooked or otherwise defective bottle of the real thing. With margins running in the 100s%, if not 1000s% it really is a no-brainer.

The only recourse is to buy from reputable retailers who will stand behind the products they sell. Even these folks get duped once in awhile but at least you might share in the loss.

Gregory Dal Piaz

Community Manager

Snooth.com

Mathieu

Hi everybody
"Ebay is a Drop in the fake wine ocean". Of course empty bottles are purchased for refilling, what else? Frankly, do you think there is a huge demand of empty bottles from collectors? Even if they can afford it, do you think it's exciting for them to buy a bottle drank by somebody else? Of course refilling and recorking are a reality. Some of these fake bottles are easy to detect, but others are simply amazing and it takes DAYS to say if it's counterfeit or not, because of the lack of datas about very old vintages and the quality of the copy: even the Chateaux themselves are most of the time unable to make the difference between originals, refilled and fakes. So I imagine how difficult it is for a "regular Joe" to be sure of the genuineness... Some of the Chateau quoted before are now using an overt system based on "chaos technology" named bubble seal (but I think I can't say the name of this company) for instance, it's the only security I've never seen a copy. So keep your eyes open and be smart !
(sorry for my English)
Mathieu, Bordeaux

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