Winemakers try to put a cork in counterfeiting

NAPA, CALIF. —  At Colgin Cellars, a kiss is not just a kiss.

For years, vintner Ann Colgin has sealed bottles of her sought-after wine headed for auction with a bright-red lipsticked kiss on the label, a charming, and undeniably personal, certificate of authenticity.

But with concerns growing about counterfeiters, she and other Napa Valley vintners are turning to high-tech fraud prevention so customers can feel confident they’re taking home genuine wine.

Colgin, who hasn’t yet had someone attempt to fake her wine and hopes to keep it that way, recently signed a deal with Eastman Kodak Co. on a system that uses invisible markers added to inks and other packaging components.

“Our wine is essentially a luxury good and I do believe that these rare and collectible luxury goods are targets,” said Colgin, whose ultra-premium wines can fetch hundreds of dollars a bottle at auction.

It’s hard to gauge how wide a problem counterfeiting is in the U.S. wine industry, which, according to a recent industry-commissioned study, pumps $162 billion a year into the economy, including grape-growing, tourism and other related categories. Wine Spectator magazine has reported that some experts believe as much as 5% of wines sold in secondary markets such as auctions may be counterfeit, although others consider that figure too high.

Unlike CD and DVD counterfeiting, wine piracy hasn’t become a noticeable drain on the industry, so U.S. vintners are acting defensively.

There have been cases of counterfeit wines reported in Europe and China, and this spring there were reports that federal authorities in New York were investigating whether counterfeits were passed off as rare vintages, including some said to be part of Thomas Jefferson’s collection. According to a lawsuit believed to have partly prompted the investigation, five bottles of wine -- including four said to be owned by Jefferson -- sold for $500,000.

Regardless of how many phony Pinots are really out there, interest in preventing fraud has soared as new technology has been developed, said Daniel Welty, marketing manager for Petaluma, Calif.-based John Henry Packaging, which prints labels for wineries as well as other clients.

“It’s more of a case the tools are becoming more available to combat the problem,” he said.

Anti-fraud measures being explored include tamper-proof seals, microchips sunk into corks and using invisible inks that show up only under special lights.

The Kodak technology employed by Colgin and three other high-end Napa wineries involves putting proprietary markers -- which Kodak will describe only as a “forensically undetectable material” -- into printing inks, varnishes and paper that can only be detected by a Kodak hand-held reader, also proprietary, which uses laser technology.

The idea is to come up with something easy to use but hard to detect, making it more difficult for counterfeiters to figure out and copy, said Steve Powell, general manager and director of Kodak’s Security Solutions unit.

John Henry Packaging is using technology developed by Hewlett-Packard Co. to develop labels with multicolored codes or graphics. Colors and character combinations can be constantly changed to thwart copycats, Welty said.

The codes can be microprinted, so they’re visible only with magnification, or in type that can be easily read.

“It’s really cool. It’s really simple, and nobody can know what the next codes are,” he said.

Fine wine can be expensive straight from the shelf, but when it comes to charity affairs, such as the Napa Valley annual wine auction going on this week, prices can go sky high.

Last year’s high bid was $1.05 million for five large-format bottles of Staglin Family Vineyard Meritage blend, along with a trip to France.

The Staglins haven’t run across any fakes, but they decided to take a preemptive step and use the Kodak system on large bottles that were likely to end up being traded, said Garen Staglin.

“We want to be sure that we can give our customers the assurance of the integrity of our brand and label after we spent so much time and effort to try to accomplish what we’ve done over the years,” he said.

In San Francisco, Jerome Zech, chief executive of WineBid.com, which had $22.5 million in sales last year, doesn’t think wine fraud is prevalent.

But with some high-end wines starting at $500 a bottle, he’s all for the industry’s move toward anti-counterfeiting measures. “It’ll help them and it’ll help us as well.”