Counterfeiting in the Primary Industry Sector and the Threat to New Zealand’s Economy

Authors: Ball, R. & Quirke, S.
Published in National Security Journal, Volume 1, Issue 1, October 2019

understand the specific definitions and types of counterfeiting as they might apply to the production of food.

New Zealand Wine

New Zealand wine has developed into a high-end NZ$1.75 billion industry in less than 50 years.20 Recent occurrences such as substituting adulterated wine, misrepresenting product, falsifying export applications, and mislabelling of wine both domestically and in Europe are examples of fraudulent activities within the industry that map with the counterfeiting  typology.21New Zealand wine is valued per litre the second highest in the world – behind France – and the rise of counterfeiting has increased thanks to elements of the industry reaching “super-premium” brand status very quickly.

In 2017, MPI instigated criminal proceedings against office holders of a North Canterbury producer in a counterfeiting case involving an estimated “tens of thousands of bottles of New Zealand wines.”22 According to public reports, the ‘Simulated’ wine had been exported to the United Kingdom (UK), Japan, Fiji, Thailand, and Australia. MPI subsequently charged the company with “making a false statement about the vintage and area of origin of wine” and “exporting wine that did not comply with…eligibility requirements.”23The following year, MPI prosecuted a prominent Marlborough wine company for not disclosing “the illegal addition of sugar to post-fermentation wine destined for Europe.”24 Industry data indicates the external counterfeit threat to the New Zealand wine industry mainly lies in Europe. For example, a 2016 bottle of counterfeit Sauvignon Blanc was procured in Europe, and while the label had the ‘Kiwi’ emblem and the word “Marlborough”, it did not show the name of any winery.25
New Zealand Wine, an organisation comprising 850 growers and 700 winery members, views the illicit counterfeit production of wine as opportunist rather than the result of organised crime, although “this situation could change in the future.”26 This is already being seen with the leaking of a French Foreign Trade Advisory Board report showing the depth of the problem in China; “for every real bottle of French wine in China, there is at least one counterfeit bottle, and the situation is only getting worse.”27 A 2016 report also outlined the extent of international wine counterfeiting and the case of Zhen Wang Huang, more commonly known by his Indonesian name Ruby Kurniawan. In that same year, FBI agents raided Kurniawan’s home in Los Angeles, and discovered stock-piled empty bottles and old corks, labels “bundled up like currency,” and recipes for faking French wine from the Bordeaux region.

New Zealand wine regions are determined to protect their brands, however there is no industry-wide understanding of counterfeiting.28 New Zealand Wine views counterfeiting as a ‘risk management’ issue, and although it represents a considerable proportion of producers, the body remains of the view that any response to counterfeiting