BEIJING — Beijing recently announced that it would start to recognize a selection of French wines in China, a country where counterfeiting of prominent French wine brands is common.
"This recognition gives us additional means to defend these names before a Chinese court," says Stéphane Le Foll, the French minister of agriculture.
French wines are not only counterfeited because of their international prestige but also because of their steep prices — a result of taxes that can be as high as 48%. Although wine from other parts of the world can be duty free, they are not as desirable as French brands.
"There are more counterfeited French wines in China than non-counterfeited ones, and the situation is getting worse. Importers and distributors of wines and spirits make the majority of counterfeited goods to lower their selling price," notes a detailed French foreign ministry trade report published in May last year.
Online shopping has further boosted counterfeits. "In two clicks counterfeited wines can enter homes. The internet changed the industry enormously by allowing wines to reach a larger audience of potential buyers," says one French wine expert, adding that buyers often purchase wines from popular Chinese e-commerce site Alibaba, where they unwittingly end up with counterfeited bottles.
After receiving numerous complaints, the Chinese government publicly denied the level of counterfeiting on Alibaba in 2015, saying the number of fakes being described was too high.
An ongoing struggle
Counterfeiting wines is a lucrative business. An executive at Moët-Hennessy, a French multinational luxury goods conglomerate, says that "the more expensive a good is, the more it is counterfeited."
The problem is so prevalent that exporting businesses have initiated strong measures against fraudulent practices.
"We must always be one step ahead and be constantly alert to stop fraudsters," says Mathieu Prot, director of intellectual property at Pernod-Richard, a French beverage company that has instituted a "zero tolerance" policy with regard to fraudulent activity.
Prot says the company, which has been more active than others on tackling fakes, has improved its credibility and image with measures such as having its own network of investigators and "raiding about 10,000 Chinese vendors every year." He adds that the company also has a law firm dedicated to "presenting fraudsters before Chinese courts."
None of the groups contacted by Les Echos revealed the exact cost of the fight against counterfeiting, but they all acknowledged the magnitude of the problem. France exported 180 million wine bottles and 31 million bottles of spirits to China in 2015, worth 513 million euros ($578 million) and 319 million euros ($359 million) respectively.