Why Authenticity Is Crucial For Safe Wine Investment16/04/2020
For anyone interested in fine wine the documentary film Sour Grapesis a must-watch. This is the story of Rudy Kurniawan, the most notorious name in the world of fine wine over the past decade, who lured in high-end collectors and sold them tens of millions of dollars of fake wine. Kurniawan has been in jail since 2013, but his actions are of course not unique and there are several lessons we should learn from his tale.
One is that eliminating fake wines out of the system has proven difficult for numerous reasons. Perhaps the most obvious is in the taste. Sampling in this way is not only destructive; who of us can claim they know what ’45 Mouton tastes like, or rather, what it should taste like at 50, 60, 70 or 80 years of age? More insidiously, what about ’62 Lafite?
Kurniawan’s genius was to routinely take a very good shoulder vintage like ’62, blend it with a little young Cabernet from the New World, and produce the acclaimed ’61 – thereby instantly multiplying the cost of his still high-quality components many times over.
In the case of the collectors in the film it was clear that many of them were willing to suspend disbelief to fulfil dreams of tasting exquisitely rare wine, an all-too-familiar example of investor emotions getting the better of rational thought. Despite concerns about where and how Kurniawan was finding these wonder wines, the victims wanted to believe that what he was bringing them was real. A seminal line in the film is after Kurniawan has gone to prison, they ask a collector what they thought of him now. The reply, ‘yeah I know he ripped us off, but … Rudy was such a great taster’.
While Kurniawan was convicted as a rogue hand, it’s clear that his actions were enabled by others who bankrolled his acquisitions, aided in producing huge quantities of fake wine, and bolstered his credibility by offering lots at auction. Whilst never convicted on charges, one very famous New York auction house settled out of court with American billionaire Bill Koch for selling him hundreds of Kurniawan fakes (Koch had prior experience buying fakes from another infamous fraud, Hardy Rodenstock, and was not to be shaken down twice). What’s happened to these known fakes? A tiny quantity was destroyed but the vast majority remain in the fine wine market today.
The high ascribed value of fake wine can thus be a barrier to ridding it from the system – in a high stakes game of pass-the-parcel who is ultimately going to bear the loss? In a showdown for the lawyers it’s one thing to assert that within the limits of probability a wine is not genuine. It is something else altogether to guarantee that it is fake. Taking all these things into consideration its therefore a better approach to have extremely robust acquisition protocols and avoid bringing fake wines into the system in the first place.
HOW OENO GUARANTEES AUTHENTICITY
Central to Kurniawan’s conviction was the testimony of Maureen Downey, founder of Chai Consulting and WineFraud.com. Amongst the world of fine wine, Maureen and her team of authenticators are a legendary force. They have placed accused fraudsters on trial (Kurniawan, for example) and under the microscope with their approach to authenticating wine. One element is forensic; bottles can be examined under high magnification or alternative light sources to sort the genuine from the fake. This can be aligned to historical research on a domaine or château to understand the exact details of production from a particular vintage. It is research like this that led to Sotheby’s Serena Sutcliffe MW to once quip, ‘There is more ’45 Mouton in the market than was ever made’.
OenoGroup’s method of sourcing stock ex-cellars, that is directly from the producing estate, is the single most important step we can take to guarantee the provenance of the wines in which clients invest, and this covers more than 95% of our inventory purchases. OenoGroup has now taken steps to partner with UK certified authenticator Siobhan Turner (former EGM of the Institute of Masters of Wine), Chai Consulting and Winefraud.com to enhance our sourcing protocols and train the Oeno wine team on authentication measures for the small portion of our acquisitions that are not ex-cellars.
Our perspective is that it’s better to keep fake stock out and have a best-in-class reputation for the veracity of our range, avoiding the integrity issues facing legacy fine wine investment companies. More details will be available through your account manager later in the spring.
As with any investment, it is always wise to ask as many questions as possible when entering the market. We strongly advise that potential investors always go through reputable channels and only trade with recognised merchants. OenoFuture is the only fine wine investment company to be a member of the WSTA (Wine & Spirits Trade Association) and we have stringent acquisition and storage procedures in place to safeguard our clients’ assets at all times.
To read Justin’s full article on UK Investor Magazine, please click here.Back Home