Distilling the alarming rise of counterfeit beer, wine and spirits

Whether it’s fake wines in Tuscany, substandard vodka in Russia, or phoney whiskey in Rwanda, counterfeit alcohol is alarmingly on the rise. According to the World Health Organization’s Global Status Report on Alcohol and Health, unrecorded alcohol has come to represent approximately 25% of all alcohol consumption worldwide.

The European Union (EU) Intellectual Property Office reports that in the EU, €2.8 billion is lost in sales every year due to fraudulent wines and spirits. In just one year, Interpol and Europol seized 26.4 million litres of counterfeit alcohol and food, worth an estimated €230 million. In February 2018, Mexican police seized 20,000 gallons of black-market tequila, with over 200 gallons containing dangerous levels of methanol, destined for resorts catering to North American tourists.

For wine, beer and spirits brands as well as their distribution and retail partners, this Molotov cocktail is potentially very bad for business: the negative impact on an alcohol company’s brand capital, customer loyalty and worldwide revenues can cause long-term damage.

Understandably, alcohol brands do not want to highlight the fact they are subject to fake versions of their products. Also, mitigating the potential for counterfeiting can be extremely complex due to the industry’s multilevel supply chain, especially when products are sold on a global scale.

The solution for alcohol manufacturers to protect their brand image and revenues? Digital end-to-end traceability.

Traceability solutions allow alcohol brands to track and trace their products from their raw materials through to production and all the way to the consumer, thanks to sophisticated serialisation by individual bottle or can – not just by lot. Serialisation is therefore one of the most cost-effective means to counteract fake alcohol.

Powered by blockchain, artificial intelligence and Internet of Things technologies, traceability solutions provide a global view of the entire supply chain. As beer, wine or spirits move down the supply chain, manufacturers can monitor where their products are at any given time, ensuring they pass through legitimate distribution and retail channels. Brands can even promote their use of digital traceability solutions to demonstrate their commitment to product quality and consumer health, which in turn can lead to increased customer loyalty.

Thanks to real-time access to data, manufacturers can also quickly flag potentially illicit activities as well as counterfeit batches. Furthermore, should a health issue arise, a digital traceability solution enables an alcohol brand to quickly mitigate the extent of the danger and immediately implement corrective measures.

Digital traceability solutions can make a significant impact in the fight against fraud in the alcohol industry. OPTEL GROUP’s end-to-end traceability solutions for the food and beverage industry provide brands with the means to guarantee the authenticity of their beer, wine and spirits; safeguard their brands; foster consumer trust; and ensure sustainable business growth in international markets.