It’s a poorly kept secret in the world of fine wine and spirits that counterfeiting is endemic. The explosion at the top end of the wine, bourbon, rye, and single malt categories has created a lot of incentive for forgery, and a lamentable number of buyers who either are unaware that they’re being duped or simply don’t seem to care.

That’s what Adam Teeter and Zach Geballe discuss on this week’s “VinePair Podcast” — why counterfeiting has become so prevalent in these categories, why uncovering these frauds is often a matter of happenstance, and the unfortunate reality that these beverages are rarely consumed because their value is just too great.

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Adam Teeter: From Brooklyn, N.Y., I’m Adam Teeter.

Zach Geballe: And in Seattle, Wash., I’m Zach Geballe.

A: And this is the “VinePair Podcast.” Like what I did there? That very slow delivery.

Z: I know you had a little tempo to your delivery. I’ve definitely heard from a few people that there’s a little speed talking on both of our ends.

A: Well, now we’re just taking it chill. What’s up, man?

Z: Here’s a question for you and when you all hear this it’ll be after, but we’re recording this before Mother’s Day.

A: We’re also recording it on Cinco de Mayo.

Z: We are recording on Cinco de Mayo but I don’t have a lot to say about Cinco de Mayo, even though it’s a big drinks holiday. We can talk about it if you want but to me, I was just having some flashbacks to Mother’s Day brunch in restaurants that I’ve worked in over the years. Mother’s Day was maybe my least favorite day to work in all the days in the restaurants. It was such just a sh*t show because anything that’s a family day like that is always going to be bad because lots of families do stuff because they feel obligated even though they don’t really want to do things together. People don’t make reservations until the last minute, and it’s just a mess. I’ve been very, very glad to not have to deal with that. Yet another holiday that’s come by where I don’t miss being in a restaurant on this one. What did you guys do for Mother’s Day growing up? Was it a big deal?

A: No. I got my mom a card. We probably did some fun breakfast in bed stuff, but we were never the family that went out to eat for that. We didn’t make brunch plans or anything. At some point, we took Naomi’s mom out for a Mother’s Day brunch in New York, but she came in from Pennsylvania. It was never really a big thing. The day that I would assume is very hard to work in a lot of restaurants is today, which is Cinco de Mayo.

Z: Well, yes, definitely.

A: It’s the Super Bowl for tequila. There are just so many tequila sales. Although I also wonder what will happen with that, because I bet a lot of that partying will spill over into this weekend because it is on a Wednesday so the revelry is not as high on the day as it would be if it were on a Thursday or Friday. That means I think we’re going to get a lot of that partying over the weekend where people feel they need to drink lots of tequila. Anyways, what have you been drinking?

Z: Well, not tequila over the last couple of days, but in a vein that you’ve talked about a lot in the last few months, I’ve been going through my bourbon collection lately. We got things put away in the new house, and I bought some stuff as a present to myself before we moved in.

A: Look at you!

Z: Well, you got to take care of yourself sometimes, too. I’ve been opening a few things and giving them a taste. One of the ones that stood out to me, as it has in the past, and we talked about it on the podcast, is the Weller Special Reserve, which is a very nice bottle. I believe it’s been on the VinePair’s Best Bourbon List.

A: Yes, it has. Actually, a couple of times.

Z: Then, the other was not a bourbon but a rye. I don’t know if you are familiar but Basil Hayden has released — they’re not quite bottled cocktails, even though the one I’m going to talk about really reminded me of a bottled cocktail — but it’s Basil Hayden Rye blended with other things like Canadian rye whiskey. Then, in the dark rye that’s blended with port. Then, Caribbean rye that’s blended with rum. I have not tried that one yet, although I do have a bottle of it. It was interesting. The dark rye was like drinking a Manhattan, which was cool, but I’d rather just make my own Manhattan and then get the exact ratio I want. It was interesting to me because it was not labeled as a cocktail, it was labeled as rye. It’s definitely got enough port in it that you taste it. Not in a bad way, but there’s definitely something else besides whiskey in the bottle. What have you been drinking?

A: I have a few things, but I also have a fun story.

Z: Oh, please!

A: Thank you. You know that I just want to tell my stories.

Z: That’s what we’re here for.

A: Thank you all for listening. This is therapy for me. I don’t even have to pay for anyone to talk to. I can just talk to all the listeners. Last week, I went to a restaurant. It was a business meal, but we went out to dinner to potentially talk to someone who we’re thinking about bringing on board. We went to this restaurant and we started with a cocktail. I have a question, so what do you think this was? On the cocktail list, it said Negroni Bianco. What do you think it was, Zach?

Z: Wow. My guess would be a white Negroni, right?

A: Exactly, a white Negroni. We all ordered three, and when the person took our order, they didn’t bring the cocktails, the actual bartender did. They were red. I said, “Hey, I think our order got put in incorrectly. We ordered the Negroni Bianco.” He said, “Oh, this is the Negroni Bianco. We make it with white vermouth.” That is a mis-titled drink.

Z: Yeah.

A: Then I said, “We thought that these were white Negronis.” To his credit, he was super nice and he said, “Oh, I could see how you would have thought that.” I think that meant that it has happened before. He said, “I’m going to go ahead and make you white Negronis, keep these. I thought that was cool, but I also thought that this has happened before so maybe rename the drink.

Z: It’s pretty hard because it’s literally just a white Negroni. It’s not a fanciful name that you misinterpreted. That’s all that bianco means in Italian, is white. I would have been equally surprised, and yes, that seems like a failure of cocktail naming.

A: I never went home to Google to see if the Negroni Bianco is actually a thing. No, when you search Negroni Bianco, it comes up and Dante’s Negroni Bianco is a white vermouth. It’s funny, though, but the only people who say it’s not white when you’re searching is, of freakin’ course, The New York Times. They say it is red, and they’re using white vermouth. They’re the only ones calling it a Negroni Bianco using it with white vermouth. Then, they’re saying use Campari. That is so stupid.

Z: At least, we don’t have a guest from The New York Times this week, so you don’t have to feel bad.

A: No, come on guys, label your cocktails correctly. Anyways, we have a really interesting thing to talk about today, and it is hot off the presses. What we’re talking about today is counterfeiting when it comes to alcohol. The reason we’re going to talk about this is and for those of you who are not aware, Acker Merrall, which is the nation’s oldest wine merchant, was caught yet again this past week selling counterfeit alcohol. To give the full backstory, Acker Merrall is an auction house and a wine and liquor retailer who got caught up in the selling of counterfeit wines through Rudy Kurniawan. who, for those of you who watched “Sour Grapes” on Netflix or are aware of this, unloaded a large majority of the counterfeit wines he was creating through them and claimed they learned their lesson.

Z: Let me add some context here, too. After Rudy was suspected of being a counterfeiter, a lot of his wines other auction houses wouldn’t touch, they still brought them in and sold them. They were not duped. People knew by that point, close to the end before anyone was arrested, that some shady sh*t was going on and Acker Merrall used to work with him.

A: We all are pretty much aware that the bourbon market is out of control, especially with certain producers. Pappys is the one most people know but now a lot of stuff that’s produced at Buffalo Trace is just as in demand. A few years ago, a bottle I remember I could find for $70 a bottle was Colonel E.H. Taylor. Colonel Taylor, the four-grain bourbon, which is a bottle that was for sale at Acker Merrall, can be found at a lot of retailers for around $3,300 a bottle. Now, its MSRP, which is crazy, is $70, but a lot of retailers are getting away with selling it for $3,000. Acker Merrall was selling a bottle of Taylor for only $1,000, which all of a sudden should have been a red flag. If the market is demanding $3,000 and Acker’s somehow selling it for $1,000, that’s an issue. Inside Edition, who broke this story, went in and bought the bottle. Someone must have tipped them off that they were selling these whiskeys for a lot lower prices than they should have been. They then sent the bottle to Buffalo Trace. The technical director of Buffalo Trace, John Medley, went through the bottle and noted immediately when he looked at the outside of the bottle, it was packaged incorrectly. The code was wrong. It was missing a special mark it was supposed to have. Then, the strip stamped over the bottle was backward, and when they tested the liquid, the alcohol proof was wrong. It was completely counterfeit. The question, first of all, is why are they still doing this? How the hell is Acker Merrall still selling counterfeit stuff? Also, if they’re doing it and they are a very famous auction house and retailer, you’ve got to imagine a lot of people are selling counterfeit, especially when it comes to bourbon.

Z: My understanding is one of the challenges with bourbon, rye whiskey, and certain Scotches, whereas with wine there are these issues of counterfeiting and they still exist. There is a longer history of tracking these products. First Growth Bordeaux and Grand Cru Burgundy have not been the ridiculously priced items that they are now, but they’ve been expensive wines for quite a long time. There’s just a longer institutional knowledge and better understanding of what is out there, what these older bottles should look like, what real bottles look like, and what fakes might look like at this point. The problem with bourbon, in particular, is the bourbon market was so poor. There was so little demand, especially with old bourbon. It’s part of the reason why all of these products were so freely available to buy. When I interviewed Wright Thompson, the author of “Pappyland: A Story of Family, Fine Bourbon, and the Things That Last,” I mean, sh*t, they took years of production of Pappy Van Winkle and blended in with Crown Royal. It’s insane. This is what the state of the bourbon industry was 30, 40 years ago. The idea that a lot of these bottles are still out there is a little hard to believe. I get that at the distillery, they might be able to do this verification. Even the auction houses, even knowledgeable consumers, there’s just less widely available or even specially held knowledge about what are the indicators of a counterfeit that are detectable. It’s a relatively new market so, of course, there’s just a flood of people trying to take advantage of it.

A: I think the thing that’s hard with bourbon and with wine is, what makes these things so counterfeitable? Why is it so easy? It’s just like with art. Once the bottle leaves the distillery or the winery, it gets lost on its travels, there are people that have QR codes. People talk about the blockchain, but I don’t really know how you’re going to use the blockchain to do this, but people think there are solutions. The bottle gets lost and it may wind up in someone’s cellar. Then, it goes to another cellar. It may not go through an auction house during the second sale, maybe it’s sold via person to person. You might be a collector and I’m a collector. You could say, “Hey, Adam, I’d like that bottle of Taylor.” I would say, “OK, Zach. I paid $150, the average price is $3,000 but we’re buddies so I’ll give you $1,500.” That could certainly happen then maybe it ultimately does go to an auction house. That’s why it’s always been fuzzy to begin with. On top of that, with a lot of these coveted bottles, especially when it comes to spirits and old wine, at some point their defining characteristic is their “smoothness.” They’re old and they are very easy to drink. A lot of these bourbons are really old in age in terms of how long they were in the barrel. I don’t mean they’re old in terms of that they were bottled in the ‘50s. That’s also probably true. I’m just talking about how long they were in barrels. For the wines, obviously, the vintage year is really, really old. I think what’s been proven by Kurniawan and others, is that flavor profile is really easy to fake. It’s really easy to mix certain wines together to create something that tastes like an old Bordeaux. I know people would say no but it actually is. It’s really easy to create things that taste like very old bourbon. Here’s something that’s crazy and it’s completely separate, but I think it is instructive. For this year’s top spirits tasting, one of the whiskeys that we tasted that was insane was the Boss Hog VII. The Boss Hog VII is 20-plus years old liquid. What they do is they age it in multiple different kinds of wood. When they take that already super-old rye and age it for a few months in different barrels, it actually creates a liquid. If you didn’t know that it was Boss Hog, if you didn’t actually taste the liquid and see the bottle get opened and maybe even get it at the farm, you would think it was a flavored whiskey. It tastes flavored. It’s not, and that’s the beauty of it. That’s what makes it so interesting. That’s why whiskey aficionados love it. It tastes like it was flavored because so many of these woods they’ve used have imparted so many different flavors that it’s just rich and flavorful. It tastes almost chocolatey. You could fake that with flavors.

Z: I think another piece here, and this is true: I think for both whiskey and wine, the other reality is that very few people have much experience drinking these high-end, very old bottles. To say even that there’s a palate and a flavor profile for 70-year-old Bordeaux or super-aged whiskey is a little hard to say because most people don’t drink that. There’s a lot of willingness. There’s this moment in that documentary you mentioned, “Sour Grapes,” where some of the people who were duped still refused to believe that they were. They are so bought in both financial terms, but also emotionally invested in it. You have these two types of people who are victimized in these crimes. Was it Bill Koch or Jim Koch? Whichever one of them was a massive collector who got swindled.

A: Let’s also not forget that prior to that swindling, there was a swindling of the Jefferson bottles.

Z: Yes, but I’m blanking on his name.

A: He was a guy from Germany, but none other than the owner of Wine Spectator was swindled. If you’ve read that book, he buys a bottle. Then, he drops it at a party because he’s showing it off. He dropped it and it burst everywhere. He was unhappy at the time, but it actually wasn’t a Jefferson bottle because they weren’t real. Anyway, you’re right. The very wealthy in these wine countries get duped as well as others.

Z: Adjacent to that are people — and this is where the comparison to art becomes really interesting and this conversation becomes interesting — there are also the people who are buying these bottles entirely for their perceived value and their potential to greatly continue to appreciate in value. Yes, it is a weird world that’s almost mind-boggling to me where someone buys what turns out to be a counterfeit bottle of E.H. Taylor but they’re never going to open it and taste it. Frankly, they might not have even an idea, if they were to open it and taste it, whether it was fake or not. They may pass it along to someone else or sell it to someone else. I’m sure you’ve seen these things, too. I’ve gotten pitch emails about them, so I’m sure you have too, Adam. People who tell you, “Hey, you can invest and own a tenth of a bottle of one of these wines as an investment. It’s owning a piece, some tiny fraction of a piece of art, a share in a famous piece. It takes all this to a somewhat logical conclusion, which so many of these products, whether they’re wine, spirits, etc., have become so removed from their presumed initial purpose, which was to be enjoyed by people who like drinking them. Now they’re so collectible, they hold so much value. They appreciate in value because other people believe they’re valuable. Now, you are in this bizarre, almost head-trippy landscape where, does it actually matter if it’s forged if everyone believes it’s valuable? I’m not an NFT person, I don’t understand Bitcoin but it feels not too distant from that whole concept.

A: If everyone believes it’s real, then maybe is it just real and who cares? No one would have caught this if a reporter hadn’t gone in and basically said we’re going to get this tested because the price just seems fishy. Most people would have just assumed that it was real, and probably the person buying it at Acker Merrall would have potentially been buying it as an investment. They know it was an underpriced commodity and would hold it. The average sales price is around $3,000. They’re getting it at $1,000, so either they immediately flip it on eBay or they hold it for a while. Look, this is the big backlash that, as you said, is happening in the art world now to where there’s a huge backlash against collectors who are buying and then warehousing. Artists don’t love it, either. First of all, both with wine and with art and they claim that the NFT market is trying to fix this, but I don’t really see how. The producer never sees the additional gains. The artist never sees the additional gains. The artist sold, it goes out into the market, through the gallery, there’s a split, usually very advantageous to the gallery. The collector is who makes the money down the road, the artist sees none of that. That sucks for the artist. That’s why you have some artists who never really see the financial windfall they should see. The same happens for wine and bourbon. That is where you have some people who are trying to fix that. What’s interesting about WhistlePig is that they price the Boss Hog at what they think the collecting market would pay for at that moment. They don’t sell it at $150. They sell it at $450 or close, in that range. That’s what they think it would be flipped for, so that’s what they’re selling it for. It’s caused there to be a massive market for Boss Hog, but not a massive secondary market. I also wonder if that would be the same for Colonel Taylor because there are places where you can still go, and there is the liquor store that’s initially selling it for $70, then someone’s buying it and flipping it up the chain. When there is all this money to be made, counterfeiting is going to happen. I would encourage you to be very wary of buying secondary bottles from the auction market. People who auction should just know that’s a risk. If you want to own a bottle of Pappy, you’re much better off trying to go to the Pennsylvania state store and getting lucky or certain retailers around the country who just happen to have one bottle. It’s a risk going to a retailer who’s known for selling secondary bottles because you have no idea where those bottles are coming from. You should also be very wary of buying online. Be wary of someone online who’s telling you that they have a bottle of Pappy or Lafite 1983. I don’t know if that was even a good year.

Z: It was our birth year, so it had to be a good year.

A: I know but you know those types of things. You should do your homework, and you should know that you can’t always fully do your homework. It’s somewhat of a risk. If you are buying to drink, you should be aware of that. If you’re buying to hold and flip, more power to you, I guess. Look, the thing that’s crazy about the Taylor is some of the stuff that Buffalo Trace saw immediately, it feels like lazy counterfeiting. How was the sticker on backward? How was the label done wrongly? That’s the easy sh*t. That’s the sh*t, as you said, should be harder to catch because someone should have to open the bottle to realize it’s not the real juice. The fact that they knew it was fake the second they looked at the bottle is crazy to me. I think Kurniawan was pretty good at faking the bottle.

Z: You also saw examples of that with his story where there were wines that were single-vineyard Burgundy. As you know, Grand Cru Burgundy made by a producer whose family in that vintage hadn’t either produced that wine or had not owned that vineyard yet. There are some examples where the descendant of the winemaker, the current proprietors, would say, “Well, we never made that wine so it has to be fake.” With wine, it’s pretty easy to do because the records, unless you’re at the winery, are not widely available online. I want to add one last point. It goes in addition to this question about whether it’s right for the speculative market to be the one that’s benefiting as these things appreciate value. There’s also an aesthetic or romantic argument to be made here. The thing that is unfortunate about this is that this disincentivizes people from drinking these things. The shame, especially with wine, but true with whiskey, too, is that it has a shelf life. It will eventually not be enjoyable to drink. When we’re talking about these products, which are ostensibly the best of the best, these things are becoming incredibly expensive because they are viewed in the wine and whiskey communities as some of the pinnacles of the form. Yes, some of it is also because they’re quite rare. That’s its own level of a value. At least in theory, what’s in the bottle is the thing that is remarkable. As the price goes up, the incentive is to never open it. It is to hold on to it and resell it eventually. I think it is a good instructive lesson for all of us. We’ve talked about this before on the podcast that even those of us who collect at a much lower level than these eye-popping numbers, eventually should want to drink the wine. If you wait forever, you will eventually miss your window. I don’t know if there’s a solution to be had in this. As I said, the speculation is valuable and people are in it for reasons that have nothing to do with enjoying wine or whiskey. If any of you listening are in this realm, drink the wine. Drink the whiskey or send it to Adam and me. We’ll drink it. We’ll tell you all about it. We’ll do it on the podcast if you want. It does make me sad that so many of these wines and whiskeys are in such demand and in such small production that, in the end, often they never really get consumed. They sit in someone’s cellar for decades or even centuries. At some point, they’re just a museum piece. They’re not the thing they were intended.

A: No, I completely agree. As I said earlier, it’s the same backlash you’re hearing now in the art world that these pieces were not meant to sit in someone’s temperature-controlled warehouse. If you go into one of these holding facilities for art, the art is slipped into a slap. It’s slid in, and it’s temperature controlled, and nothing can touch the art. It’s completely protected. The artist did not intend for that. The artist intended to have impact. They intended for the art to be seen and appreciated and felt. That’s the same with the winemaker. The winemaker intended the wine to be consumed, processed, enjoyed, and be something that transforms you. Same with the whiskey. These distilleries weren’t sitting around these recipes thinking they were going to put this in a bottle and it’s never to be opened. If you want to put them in the auction market because you want to get some wines or whiskey that you have no other way to get, I understand. If you’re just doing, as you said, to flip and resale, that’s a different thing entirely. Then I don’t really feel so bad for you if the thing happens to be counterfeit because you’re never going to taste it anyway.

Z: Yeah, exactly.

A: Oh, Zach. Fun conversation. Let me hear what you guys think out there. Shoot us a line at [email protected]. Always open to hearing your thoughts and also suggestions for other topics. Zach, I’ll see you right back here next week.

Z: Sounds great.

Thanks so much for listening to the “VinePair Podcast.” If you love this show as much as we love making it, then please leave us a rating or review on iTunes, Spotify, Stitcher, or wherever it is you get your podcasts. It really helps everyone else discover the show.

Now for the credits. VinePair is produced and recorded in New York City and in Seattle, Wash., by myself and Zach Geballe, who does all the editing and loves to get the credit. Also, I would love to give a special shout-out to my VinePair co-founder, Josh Malin, for helping make all this possible and also to Keith Beavers, VinePair’s tasting director, who is additionally a producer on the show. I also want to, of course, thank every other member of the VinePair team who is instrumental in all of the ideas that go into making the show every week. Thanks so much for listening and we’ll see you again.

Ed note: This episode has been edited for length and clarity.

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