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Wines & Spirits Anti-Counterfeit, Brand Protection & Product Authentication Markets, Opportunities & Synergies for Providers of Integrated Solutions & Technologies

Wines & Spirits Anti-Counterfeit, Brand Protection & Product Authentication Markets, Opportunities & Synergies for Providers of Integrated Solutions & Technologies

PRODUCT CRIME – WINES & SPIRITS

Wines & spirits are:

Widely counterfeited
Subjected to various forms of tampering, refilling and / or dilution
Targeted by smugglers (particularly between countries with contrasting high & low excise tax regimes).

Counterfeiting operations in particular can be scaled up and can be highly lucrative and are known to be often linked to organised crime networks and in some cases terrorist groups.

LOOK-ALIKE COUNTERFEITS VERSUS REFILLING OF GENUINE EMPTY BOTTLES

The problem of copy or look-alike products is widespread for spirits and also wines. Such copy and Look-alike products aim to perform the same function as a genuine product but are produced by an independent manufacturer under a similar name, and nearly always are of inferior quality.

The products are sold in markets where consumers are vaguely familiar with Trade Marks and international brands but often have little comprehension of English - All major spirits brands are vulnerable to such attacks. Nonetheless it is clear that such challenges have by no means deterred counterfeiters in China.

Unfortunately, no matter how sophisticated the on-bottle devices may be and how many steps are taken to protect a genuine empty glass bottle to prevent illicit copying or reproduction of a particular glass bottle, the widespread practice of obtaining empty genuine bottles and refilling them tends to subvert this type of approach brand protection. This practice is particularly prevalent in China and needs to be factored in to any brand protection strategy.

Counterfeiters are generally compelled to rely on either:

Look-alike counterfeits using standard bottles which can only approximate to the appearance of custom made bottle
Collecting and re-filling empty used bespoke proprietary bottles and this generally means that the original genuine label is still attached to the bottle.

All major wines & spirits brands are vulnerable to such attacks and both approaches are widely used by criminals today.

LOOK-ALIKE SPIRITS BOTTLES

Such copy and look-alike products aim to perform the same function as a genuine product but are produced by an independent manufacturer under a similar name, and nearly always are of inferior quality. The products are sold in markets where consumers are vaguely familiar with trademarks and international brands.


EXECUTIVE SUMMARY
1 INTRODUCTION
1.1 TYPES OF PRODUCT CRIME – WINES & SPIRITS
1.2 CATEGORY DEFINITIONS
1.3 SOME MAJOR INITIATIVES IN BRAND PROTECTION
1.3.1 The Anti-counterfeiting Trade Agreement (ACTA)
1.3.2 Interface Public Members (IPM) – WCO / GS1 - A Tool for Customs
1.3.2.1 New Mobile IPM Launched in 2013
1.3.2.2 WCO Operations – Raids & Seizures
1.4 KEY DRIVERS – PRODUCT CRIME – WINES & SPIRITS
1.4.1 China & the Internet
1.4.1.1 The Economic Boom of China
1.4.1.2 The Rapid Growth of the Internet
1.4.2 Identification of High Risk Product Categories
1.4.2.1 Powerful Motivators for Counterfeiters
2 TAX & THE ROLE OF GOVERNMENT
2.1 UNRECORDED & ILLICIT ALCOHOL
2.1.1 Unrecorded Consumption - Definition, Categories & Market Sizing
2.2 SOME PERSPECTIVES ON TAXING WINES & SPIRITS
2.2.1 Unintended Consequences of High Taxes on Alcoholic Drinks
2.2.2 Tax Differentials between Countries Fuels Product Crime
2.2.3 Smuggling & Counterfeiting within the EU
2.2.4 Case Study – Alcohol Smuggling between States in India
2.2.5 Policy Considerations – Impact on Misuse & Problem Behaviour
2.3 EXCISE TAXES ON ALCOHOL
2.3.1 Excise Tax by Country
2.3.2 Alcohol Excise Tax Rates – By Country - World
2.3.3 Alcohol Excise Tax Rates – By State - US
2.4 DANGER TO HUMAN HEALTH
2.5 EXCISE TAX STAMPS – ALCOHOL
2.5.1 Case Study - OpSec - Tax Stamp Security & Authentication
2.5.2 Case Study - SICPAtrace™ - Tax Stamp Security & Authentication
3 WINES
3.1 WINES - TRENDS
3.1.1 Wines - Key Trends
3.1.2 Wines - Regional Trends
3.1.2.1 Old World versus New World Wines
3.1.2.2 Old World Wines (Europe)
3.1.2.3 New World Wines (US, Chile, Argentina, Australia, South Africa, Asia)
3.1.2.4 Champagne versus Other Sparkling Wines
3.1.3 High Growth Chinese Wine Market
3.1.4 Impact of Tax Changes in Asia – Wines & Spirits
3.1.4.1 China & Hong Kong – Tax Implications
3.1.4.2 Fine Wine Auctions in Hong Kong
3.1.5 Chinese Investments in French Vineyards
3.1.6 The Wine Market in India – Potential for Growth
3.2 PRODUCT CRIME - WINES
3.2.1 Counterfeit Wines – A Segmentation
3.2.2 Case Study - Red Bicyclette Brand – Ernest & Julio Gallo
3.2.3 Case Study - Mis-Labelled Italian Wines - Tuscany's Montalcino
3.2.4 Case Study – Counterfeit Wines in the UK - Jacob’s Creek & Other Brands
3.2.5 Examples of Counterfeit Corks, Capsules & Labels – Collectible Fine Wines
3.2.6 Case Study – US Chef Faces Lawsuit – Sale of Allegedly Counterfeit Fine Wine
3.2.7 Authentication of Fine Wines - Special Challenges
3.2.8 China - Counterfeit Wine – A Special Case
3.2.8.1 The Fine Wine Empty Bottle Trade in China
3.2.8.2 Case Study – A Visit to a Chinese Winery was Eye-Opening
3.2.8.3 Defensive Registration of a Brand Mark in China
3.2.8.4 Case Study – Australian Wine Brand Penfolds - Counterfeit Attacks in China
3.2.8.5 Online Counterfeit Wine Sales in China
3.3 BRAND PROTECTION – WINES
3.3.1 The More Traditional Approach to Brand Protection of Wines
3.3.2 Some Leading Brand Protection Solution Providers – Wines
3.3.3 Case Study - Rioja Wine
3.3.3.1 Wine Labels with Generic Hologram Denoting Region of Origin - Rioja
3.3.3.2 Spanish Wine with Scrambled Indicia Code Label
3.3.3.3 Case Study - Promotion and security of Spanish Wines – CTOV
3.3.3.4 EU Systems for Geographical Indication and Traditional Speciality
3.3.4 Case Study - Opus One - US
3.3.5 Case Study - Shala One – Thai Wine with a Resemblance to Opus One Label
3.3.6 Case Study - Chateau Margaux & Chateau Lafite– Multiple Security Devices
3.3.7 Case Study – BubbleTag™ & Other Devices from Prooftag
3.3.8 Case History – Kodak Helps Napa Valley Wineries Fight Wine Fraud
3.3.9 Dispute Goes Legal - Mr. Koch (Collector) vs. Mr. Kurniawan (Counterfeiter)
3.3.10 The Mr. Koch Approach to Brand Protection – Fine Wines
4 SPIRITS
4.1 SPIRITS - TRENDS
4.1.1 Spirits - Key Trends
4.1.1.1 Premiumisation in the Spirits Sector
4.1.1.2 Proliferation of Flavour Variants in Spirits – Vodka & Whiskey
4.1.1.3 New Entrants & More Obscure Spirits Brands - Niche Appeal
4.1.1.4 Implications of Key Trends for Counterfeiting of Spirits
4.1.2 Spirits - Regional Trends
4.1.2.1 Western Markets – North America & Europe
4.1.2.2 Emerging Markets
4.1.2.3 Case Study – Diageo Asia Investment in Spirits Brand - Some Dangers
4.2 PRODUCT CRIME SPIRITS
4.2.1 Counterfeit Spirits Manufactured by Criminals Hurts & Kills People in the UK
4.2.2 Case Study - Bootleg Alcohol – From Criminal Manufacture to Poor Students
4.2.3 Case Study – Counterfeit Spirits in the UK – A Steady Stream over the Years
4.2.4 China – Counterfeit Spirits – A Special Case
4.2.4.1 Crackdown on Multiple Luxury Product ‘Gifting’ in China
4.2.4.2 Protection for Chinese Brands in China
4.2.5 Russia – Counterfeit Spirits – A Special Case
4.2.5.1 Vodka in Russia
4.2.5.2 Counterfeit Whiskey in Russia
4.2.5.3 Price Control Measures on Alcohol in Russia
4.2.6 India – Counterfeit Spirits – A Special Case
4.2.7 Case Study - Taiwan Seizures – Counterfeit Wines Spirits
4.3 BRAND PROTECTION – SPIRITS
4.3.1 Tamper evident / Holographic Shrink Sleeves
4.3.2 Molecular Micro-Taggants – Spirits
4.3.3 Case Study - Wu Liang Ye White Spirit – Multiple Brand Protection Features
4.3.4 The Scotch Whisky Association (SWA) – Anti Counterfeit Activities
4.3.4.1 Protection as a Geographical Indication (GI)
4.3.4.2 Brand Abuse by Subtle or Oblique References of Scottish Origin
4.3.4.3 Counterfeit Scotch Whiskey Made in Europe – On the Increase
4.3.5 International Federation of Spirits Producers – IFSP
4.3.6 Operation Opson – Europol / Interpol –$ Millions Seized
5 SUPPLY SIDE INDUSTRY STRUCTURE
5.1 MARKET REACH OF BRANDS – WINES VERSUS SPIRITS
5.2 LEADING COMPANIES – WINES & SPIRITS
5.2.1 Structure of the Wine Industry
5.2.2 Structure of the Spirits Industry
5.2.3 Leading Wine Companies - World
5.2.4 Leading Spirits Companies - World
APPENDIX - Leading Brands & Brand Owners – Wines & Spirits
6 A STRATEGIC APPROACH TO BRAND PROTECTION
6.1 THE PATH TO BECOMING A PROVIDER OF INTEGRATED SOLUTIONS
6.1.1 Integrated Brand Protection Solutions
6.1.2 Levels of Defence – 1st, 2nd & 3rd
6.1.3 The Layered Approach for Enhanced Security
6.1.4 Major Types of Security Solution& Selection Criteria
6.2 THE IMPORTANCE OF PACKAGING
6.2.1 Central Role for Packaging / Label Converters in Creating Integrated Solutions
6.2.2 Packaging Design can Provide Additional Security
7 SECURITY WITH PACKAGING
7.1 PACKAGING COMPONENTS – WINES & SPIRITS
7.1.1 Characteristics of Packaging – Wines & Spirits
7.1.2 Structural Packaging Formats – Wines & Spirits
8 GLASS BOTTLES – WINES & SPIRITS
8.1 ECONOMICS OF GLASS BOTTLE MAKING
8.2 ILLICIT APPROACHES TO THE GLASS BOTTLE CHALLENGE
8.3 HIGH TECH TESTING TECHNIQUES FOR GLASS BOTTLES
8.3.1 Centre d’Etudes Nucleaires de Bordeaux Gradignan (CENBG) Laboratory
8.3.2 The Isotope Cesium-137 Test
8.4 EXISTING MOULDED BOTTLE CODES
8.4.1 How to Read Moulded Glass Bottle Codes from O-I (Owens IIlinois)
8.5 UNIQUE CODES FOR INDIVIDUAL BOTTLES
8.5.1 Laser Etched Coding / Marking Solutions – Glass Bottles
8.5.2 Case Study – Domino Laser Etching - Château Cheval Blanc
8.5.3 Unique ID Marking for Glass Bottles – Saverglass / St. Gobain, France
8.6 PERSONALISATION OF BOTTLES – COLOURS, ENGRAVING, INSERTS
9 CLOSURES, CORKS, SHRINK SLEEVES & CAPSULES
9.1 POTENTIAL SECURITY BENEFITS
9.1.1 Multiple Security Solutions – Wines & Spirits
9.1.2 Plastic Injection Moulded & Metal ROPP Closures - Wines & Spirits
9.1.2.1 Case Study – Amcor Closures & N’CRYPT™ - Anti-counterfeit Solutions, Australia
9.1.2.2 Case Study - Global Closure Systems (GCS) / UCP – UK / Germany
9.1.2.3 Case Study - Guala Closures Group, Italy / Luxembourg
9.1.2.4 Case Study - Reynolds Group / Closure Systems International, NZ
9.1.2.5 Case Study - Herti, Bulgaria
9.1.2.6 Case Study - Manaksia, India
9.1.2.7 Case Study - Shandong Lipeng, China
9.1.2.8 Examples of Premium Closure Designs – Spirits
9.2 CORKS – WINES & SPIRITS
9.2.1 Traditional Cork Stoppers Facing strong Competition
9.2.2 Cork Stoppers versus ROPP Aluminium Closures
9.2.3 Cork Stoppers – Natural versus Synthetic
9.2.4 Cork Stopper Types
9.2.4.1 Case Study - Corticeira Amorim, Portugal
9.2.4.2 Case Study - Noel Corp. – Nomacorc, US
9.2.5 Corks are Central for Authentication of High-End Wines
9.2.6 Laser Etch Marking of Wine Corks
9.3 SHRINK SLEEVES & CAPSULES – WINES & SPIRITS
9.3.1 Shrink Sleeves
9.3.1.1 Case Study - Sleever International & Piper Heidsieck Champagne, France
9.3.2 Case Study - CCL Decorative Sleeves, UK
9.3.2.1 Case Study - Gilbreth Shrink Sleeve for Malibu RED Rum, US
9.3.3 Capsules
9.3.3.1 Case Study - Amcor Capsules for Wines & Spirits
10 SMART PHONE AUTHENTICATION – THE NEW NORM?
10.1 WORLDWIDE FOOTPRINT – SMART PHONES
10.2 ADVANTAGES OF SMART PHONE READABLE CODES
10.3 ADDRESSING THE EMPTY BOTTLE REFILLING PROBLEM WITH SMART PHONES
10.4 OVERVIEW – SMART PHONE ENABLED AUTHENTICATION
10.5 WHY SMART PHONES FOR BRAND PROTECTION?
10.6 SMART PHONES – MOBILE MARKETING & ANTI-COUNTERFEIT
10.7 SELECTED SOLUTION PROVIDERS – SMART PHONE ENABLED BRAND PROTECTION
10.7.1 Digimarc Discover™ – Smart Phone Enabled
10.7.2 Document Security Systems (DSS) - AuthentiGuard™ – Smart Phone Enabled
10.7.3 DuPont Authentication IZON™ – Smart Phone Enabled
10.7.4 Graphic Security Systems (GSSC) - Security Indicia – Smart Phone Enabled
10.7.5 Spectra Systems / InkSure – TruBrand™ - Smart Phone Enabled
10.7.6 tesa Scribos - dtect™ App - Smart Phone enabled
11 MARKET SIZING – WINES & SPIRITS
11.1 EVOLUTION OF MARKETS FOR WINES & SPIRITS – BY VOLUME / VALUE
11.2 PACKAGING COMPONENTS – MARKET SIZING ESTIMATES
11.2.1 GLASS BOTTLE VOLUME ESTIMATES – WINES & SPIRITS
11.2.2 CAPS / CLOSURES VOLUME ESTIMATES – WINES & SPIRITS
11.2.3 CAPSULES / SHRINK SLEEVE VOLUME ESTIMATES – WINES & SPIRITS
11.2.4 LABEL VOLUME ESTIMATES – WINES & SPIRITS
11.3 GLOBAL FINANCIAL LOSSES – COUNTERFEITING & PIRACY
11.4 ILLICIT ALCOHOL & COUNTERFEIT WINES & SPIRITS
11.4.1 Counterfeit Wines & Spirits – Branded, Bottled & Traded
11.4.2 Counterfeit Wines & Spirits - China
11.4.3 Financial Losses Due To Counterfeiting – Wines & Spirits
11.5 BRAND PROTECTION SOLUTIONS
11.5.1 Overview of the Market for Brand Protection Solutions – All Verticals in 2014
11.5.2 Financial Losses from Smuggling – Wines & Spirits
11.5.2.1 Alcohol Smuggling Today
11.5.2.2 Tax Differentials between Countries / States – An Important Driver of Smuggling
11.5.2.3 Financial Losses – Uncollected Tax Revenues – Selected Countries
11.5.2.4 Case Study – Excise Tax in the UK
11.5.3 APPENDIX – Market Data – Wines & Spirits
11.5.3.1 Global Breakdown – Wines by Product Types
11.5.3.2 Global Breakdown – Spirits by Product Types
11.5.3.3 Global Breakdown – Wines & Spirits by Region
11.5.3.4 Wine Sales Volumes – Some Famous Wine Growing Regions
11.5.3.5 Wines – Annual Consumption by Country - Top 10 Ranking
11.5.3.6 Spirits – Annual Consumption by Country - Top 10 Ranking
11.5.3.7 Per Capita Consumption – Wines & Spirits

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