This is a longer version of an article also published in the Financial Times.
See also Howard G Goldberg's report on the latest report in Der Stern.
Wine, liquid and unpredictable, could hardly be easier to doctor unfortunately, even to a standard capable of convincing professionals. Indeed our favourite drink has been adulterated and counterfeited since at least the first century AD when Pliny the Elder complained that "not even our nobility ever enjoys wines that are genuine".
The big difference now however is the price of bottles that are sold as 'fine and rare' to adopt saleroom parlance, most of it from a handful of top producers in Bordeaux and Burgundy. Fuelled by an international explosion of interest in wine among the swelling ranks of the super-rich, wine prices have soared since the 1980s. Some bottles of blue chip wines such as burgundies from the Domaine de la Romanée Conti or the late master winemaker Henri Jayer burgundy and red bordeaux from one of the smaller estates such as Château Pétrus or Lafleur have been known to command five-figure sums, in pounds, if the vintage is sufficiently sought after.
All of this has only encouraged the unscrupulous. It may be many years after purchase that a collector decides to open that bottle of Château Latour-à-Pomerol 1961 or Roumier, Bonnes Mares 1923, only to find that the liquid inside bears little relation to the elixir promised by the label and suggested by the price. Nor can the buyer inspect the cork for the correct markings before pulling it. Collectors have tales of taking dubious bottles back to the château or domaine for authentication, but even the producer may need to taste the wine before venturing an opinion, and then it may after all be only an opinion. There is as yet no foolproof analytical technique for verifying precise vintage and geographical provenance.
A detailed inspection of labels can help, as fonts, colours and type sizes have tended to evolve, but many of these dubious wines supposedly come from an era that predates the current regime in charge of a wine estate, who have generally only recently realised the importance of rigorous cellar records. Meanwhile the counterfeiters of old labels have become increasingly skilled.
The glass quality, colour, weight and shape can offer a few clues, and so empty bottles of particularly old and expensive bottles of wine (and spirits) can command healthy sums in certain markets, notably Hong Kong. Knowledgeable wine collectors and producers insist on seeing the destruction of the empties after some particularly serious wine tastings nowadays.
Fake bottles may have been in circulation for years but it is only relatively recently that their incidence has become too great to ignore. The problem however is that by the law of averages it is likely that any auctioneer or fine wine trader has sold at least some fake wine, however unwittingly. This has acted as an unhealthy brake on any concerted campaign to clean up the fine wine market. Serena Sutcliffe, head of Sotheby's wine department since 1991, has been one of the few to go willingly on the record on this issue, warning last year that more 1945 had been sold than had ever been made in that famous vintage.
Another is California-based fine wine consultant Maureen Downey, a former auction wine specialist who now runs her own fine wine business Chai Consulting. She feels strongly that the fine wine trade has fallen short of its responsibilities. "Jewellry is rarely auctioned without receipts from the seller," she points out, "why should fine and rare wine be any different? I think it is fair that buyers ask what has been done to verify, or at minimum question the provenance of collections offered with equal diligence. Did the retailers, brokers or auction houses ask for receipts or proof of sales? Where did the consignor get a hold of many of the gems they offer, and how much did they spend? Sometimes consignments are just so opulent that they beg to be questioned. I always look at all these variables when considering a purchase for myself or my clients."
Her argument is that auctioneers, most of whom charge both buyers and vendors commissions of between 10 and 19.5 per cent, and traders with their generous mark-ups, are short-changing their customers. "There are a few bad eggs - but not at the specialist level. Most specialists do their due diligence and are above board. The major problem is training or lack thereof. As always, experience is invaluable. It is too easy to hide behind poorly trained assessors or wine inspectors. They all make fair margins so they owe it to their customers to make sure that they properly train the people who inspect wines."
That training is becoming considerably more complex however. An increasing number of fine wine producers have been developing varied new ways of protecting the authenticity of their products. An early measure, for example, was Château Pétrus's label markings that could be read only under ultra-violet light. Others have been engraving bottles, or linking microchips to the process of pulling the cork. Understandable secrecy surrounds the detail of some of these measures but we can be sure that fine wine will be a useful market for security-linked technologies. Such measures apply only to younger vintages, however, not the galaxy of mouthwatering combinations of names, vintages and extra-valuable bottles larger than the standard 75cl size that have been emerging for sale of late.
Pétrus, which makes just 2,500 cases of wine in a good year, has long been a prime target of the counterfeiters. Large formats of it lie in pride of place in cellars all over the world when the current director of the property Christian Moueix has grave doubts that larger bottle sizes were even used by the previous owners before 1945. "Although all I can say for certain is that these impériales [the jumbo, six-litre size] of 1921 are highly improbable – they would have made no sense at that time".
As Maureen Downey says, "Why are more buyers not asking from where these 'amazing - best cellar of all times!' are coming? Anyone think to
investigate and determine exactly how they had amassed such collections? Was it a lifetime pursuit, or a quick investment? Ultimately, in my experience, it's usually about fragile egos and greed."
Fortunately perhaps, one particular American wine collector with extremely deep pockets and an ego that can be assumed fairly robust has decided to wade in and pursue those who have sold him wines which he believes to be fakes, giving rise to the current US investigation now involving the FBI. Billionaire William I. Koch is no stranger to litigation, having spent years locked in dispute with his brothers over the family oil company. Among his many other achievements he financed, and helped crew, the winning America's Cup boat in 1992 and is a lifelong collector, of boats, art and wine. It was a demand for authentication of one of his most treasured bottles in a 2005 exhibition that alerted him to the possibility that he may have been duped, and he did not like it one bit. David Molyneux-Berry, former heard of Sotheby's wine department, was called in to sniff out possible fakes in just two of his cellars, in Palm Beach and Cape Cod (a third warehouse crammed with painstakingly barcoded bottles is being prepared for inspection).
Says Molyneux-Berry, "Bill has hit the nail on the head because he is not going to settle, not like some people who have been defrauded and don't want to look like idiots so they've taken compensation and handed back the bottles, bottles which the fraudsters simply put back on the market."
Assisted by the likes of Molyneux-Berry, an ex FBI agent and others on both sides of the Atlantic, Koch is focussing his interest on the German wine trader called Hardy Rodenstock who supplied Koch's four 'Jefferson bottles', red and sweet white bordeaux supposedly from the 1784 and 1787 vintages bought by the 18th century connoisseur president Thomas Jefferson. Rodenstock claimed in the mid 1980s that he had been offered "about 30", as he put it to me this week, of these bottles engraved 'Th. J.' from a bricked up cellar in Paris by a vendor whose name Rodenstock says he has forgotten.
This, as you may imagine, caused quite a stir in fine wine circles at the time. In 1985 Christie's, who subjected a half bottle from the collection to various tests, auctioned a bottle of the Lafite 1787 for £105,000, still the highest price ever paid for a bottle of wine – although it turned to vinegar after being displayed in the Forbes Museum upright under strong lights which dried out the cork and fatally let air in. Two years later Christie's sold a half bottle of the Margaux 1784 to Marvin Shanken, publisher of the American magazine Wine Spectator. There is therefore a certain bittersweet flavour to the current pursuit of Rodenstock by the then head of Christie's arch-rivals Sotheby's wine department, Molyneux-Berry.
Rodenstock, now 65, appeared on the fine wine scene as a pop music entrepreneur who established a connection with one of Germany's wine magazines and had built up an enviable cellar, investing heavily in the then unfashionable but incomparable sweet white bordeaux Château d'Yquem. In the 1980s and 1990s he hosted a number of extraordinary wine events, three of which I attended, describing the first two in detail in my memoir Tasting Pleasure/Confessions of a Wine Lover. In June 1985, six months before Christie's offered the Lafite, I witnessed what we were told was the opening of the first red wine from the 'Jefferson collection' at first growth Château Mouton-Rothschild in Bordeaux, a 1787 Branne Mouton, as the estate was then known. A taste of it was ferried up to an ailing but delighted Baron Philippe de Rothschild in his bedroom above the tasting room by his grandson. The Baron's cellarmaster Raoul Blondin had been expecting vinegar and became extremely excited by the unexpectedly toothsome reality. Michael Broadbent of Christie's had predicted something "a bit acidic, a bit decayed". But in fact once the treacle-brown liquid was shared around between us, Hardy Rodenstock and his group of fellow German wine lovers, the bouquet actually grew in the glass. The wine almost tasted as though it had had some port added to it, so vigorous and rich was it. It was undoubtedly a delicious drink.
The following September Michael Broadbent and I also constituted the British contingent at a quite exceptional 12-course, 66-wine feast at Château d'Yquem in Sauternes where the pièce de resistance was a flask of (rather tired) sweet wine, supposedly Yquem, in an engraved flask dated at mid 19th century. (Hardy now says he has no memory of this wine but can remember sourcing it in South America, the cited source of this antique). The then owner of this historic estate, Comte Alexandre de Lur-Saluces told me then that Rodenstock owned far more vintages of Yquem than he did. More than 100 of these were to emerge at the third and last Rodenstock event I witnessed, the culmination of a week-long series of tastings in Munich in 1998 devoted to Yquem, all the way back to those two Jefferson vintages (rather rank-tasting, I seem to remember). Fellow participants included three of Hong Kong's most fastidious wine collectors, France's leading wine writer Michel Bettane, Austrian glassmaker Georg Riedel, Italy's most famous wine producer Angelo Gaja and, arguably Munich's most famous citizen, Franz Beckenbauer. (See my tasting notes at Yquems from 1991 back to 1784.)
By then, doubts about the provenance of some of Rodenstock's wines were being fairly widely expressed in fine wine circles and I referred to them in an article I wrote about this extraordinary event in the FT's How to Spend It magazine. The result was a red-hot fax machine for the next few days as he fired off copies of pages from auction catalogues explaining various provenances.
I have always found Rodenstock enigmatic. Could managing pop stars I had never heard of really have generated enough cash to buy all these bottles so generously opened? Then there was a strange episode when for reasons I forget we shared a ride in Bordeaux and he showed me with great pride, but for no obvious reason, a walnut he had stuffed with a condom. A telling display of dexterity and ingenuity perhaps?
Thanks to Hardy Rodenstock however, I have had some of the most extraordinary tasting experiences of my life. I have no idea whether the bottle of Yquem 1811, the famous year of the comet, served in Munich was genuine, but I assure you it was one of the most delicious liquids I have ever tasted, even if strangely raspberry-flavoured. Anyone who could create that has my respect.
Gradually over the years, Rodenstock seems to have quarrelled with most of his fellow German-speaking wine lovers and commutes between Munich, Kitzbühel and Marbella. There was a high profile Munich court case in the early 1990s in which fellow collector Hans-Peter Frericks claimed his ex-friend Rodenstock had sold him fake bottles. Rodenstock maintains they were faked after the sale. Molyneux-Berry inspected Frericks cellar in 1989 before the lawsuit and found some literally incredible combinations of vintage and format.
"I turned down the Frericks cellar in Germany because although he had some great wines there were just too many fakes. He had definitely been defrauded," he recalls. "Now that I am acting for Bill Koch we've been following a paper trail of all sorts of dubious transactions and the same people always seem to be involved. So there are only so many routes into the American market.
"It does seem to be more of an American problem because the collecting mentality is different – collectors like to have every stamp in the book, so to speak. People in Britain who have similar wine collections are rarely British. They are the sort of super-rich people who find it amusing to have fantastic cellar but are only just finding out that they have been tricked. We know some of their names. Some of them have stepped forward but only the Americans have done something about it. We're going to see action. Bill Koch is a hero because he's prepared to stand on the parapet."
There is a big difference between me and Koch, of course. I was a mere hanger-on who paid no more than my air fares to taste these extraordinary liquids. But then there is the argument that as a form of crime, ripping off multi millionaires via their precious bottle collections is hardly the most contemptible. And the general public of course like nothing more than to see experts of any sort conned. However, it does seem, to judge from the apparently unstoppable flow of great old wines on to the market and the soaring prices paid for them, that there are clearly legions of willing buyers new to wine and anxious to build up a cellar. This is surely the ideal time for a really thorough spring clean of the fine wine market.