Geopolitics

China Fights Rampant Counterfeiting Of French Wine

At the Bordeaux and Aquitaine Wine Festival in Wuhan, central China
At the Bordeaux and Aquitaine Wine Festival in Wuhan, central China
Marie-Josée Cougard

BEIJING â€" 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.

The announcement, made at the G20 agricultural ministers meeting in China, is a victory for France. China will now recognize 45 Bordeaux wines that have the prestigious French AOC certification.

"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 â€" 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.

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Future

How Facebook's Metaverse Could Undermine Europe's Tech Industry

Mark Zuckerberg boasted that his U.S. tech giant will begin a hiring spree in Europe to build his massive "Metaverse." Touted as an opportunity for Europe, the plans could poach precious tech talent from European tech companies.

Carl-Johan Karlsson

PARIS — Facebook's decision to recruit 10,000 people across the European Union might be branded as a vote of confidence in the strength of Europe's tech industry. But some European companies, which are already struggling to fill highly-skilled roles such as software developers and data scientists, are worried that the tech giant might make it even harder to find the workers that power their businesses.


Facebook's new European staff will work as part of its so-called "metaverse," the company's ambitious plan to venture beyond its current core business of connected social apps.

Shortage of French developers

Since Facebook CEO Mark Zuckerberg announced his more maximalist vision of Facebook in July, the concept of the metaverse has quickly become a buzzword in technology and business circles. Essentially a sci-fi inspired augmented reality world, the metaverse will allow people to interact through hardware like augmented reality (AR) glasses that Zuckerberg believes will eventually be as ubiquitous as smartphones.

The ambition to build what promoters claim will be the successor to the mobile internet comes with a significant investment, including multiplying the 10% of the company's 60,000-strong workforce currently based in Europe. The move has been welcomed by some as a potential booster for the continent's tech market.

Eight out of 10 French software companies say they can't find enough workers.

"In a number of regions in Europe there are clusters of pioneering technology companies. A stronger representation of Facebook can support this trend," German business daily Handelsblatt notes.

And yet the enthusiasm isn't shared by everyone. In France, company leaders worry that Facebook's five-year recruiting plan will dilute an already limited talent pool, with eight out of 10 French software companies already having difficulties finding staff, daily Les Echos reports.

The profile of Facebook founder Mark Zuckerberg displayed on a smartphone

Cris Faga / ZUMA

Teleworking changes the math

There is currently a shortage of nearly 10,000 computer engineers in France, with developers being the most sought-after, according to a recent study by Numéum, the main employers' consortium of the country's digital sector.

Facebook has said its recruiters will target nations including Germany, France, Italy, Spain, Poland, the Netherlands and Ireland, without mentioning specific numbers in any country. But the French software sector, which has so far managed to retain 59% of its workforce, fears that its highly skilled and relatively affordable young talent will be fertile recruiting grounds — especially since the pandemic has ushered in a new era of teleworking.

Facebook's plan to build its metaverse comes at a time when the nearly $1-trillion company faces its biggest scandal in years over damning internal documents leaked by a whistleblower, as well as mounting antitrust scrutiny from lawmakers and regulators. Still, as the sincerity of Zuckerberg's quest is underscored by news that the pivot might also come with a new company name, European software companies might want to start thinking about how to keep their talent in this universe.

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