Monday, April 4, 2016

How Much Fake Pappy is Out There?

In 2012, the wine world was rocked by the arrest of Rudy Kurniawan, a well known collector of fine wines who was charged with selling counterfeit wine. Kurniawan is currently serving ten years in federal prison, but the scope of his crimes is still not entirely known. His fraud cast a pall over the world of wine collecting that will likely last for years, maybe even decades.

Fake Scotch has been a problem on the collectors' market for years, but could something similar happen with bourbon? Is it happening right now? If you look on ebay, you will see countless empty bottles of valuable bourbons like Pappy Van Winkle selling for hundreds of dollars. Who would pay hundreds of dollars for an empty bourbon bottle? Well, when the same bottle can be refilled and fetch thousands of dollars on the bourbon secondary market, a few hundred isn't much to pay.

Adam Herz, founder of the LA Whiskey Society, has done some deep digging into the counterfeit bourbon phenomenon. He has verified some fakes by matching bottle numbers on empty bottles sold on ebay with full bottles that were later sold on the secondary market. I asked Adam to answer some questions about the world of fake bourbon.

Sku: How much fake Van Winkle do you think is out there?

Adam: Maybe a few hundred in circulation at this point. But consider that there are currently 51 empty Van Winkle bottles for sale on eBay, which isn’t unusual for any given moment…

Sku: How many fake bottles have you verified went directly from ebay to a sale on the secondary market?

Adam: I’ve specifically verified two that have been resold — that may not sound impressive, but you have to understand that the counterfeits in question are nearly impossible to detect, especially just from online photos. But I didn’t need to find a single one to tell you that this is happening and has been happening for a while. The hundreds of past eBay sales prove that just by their existence. Especially since it was the same few eBay nicknames buying up nearly all the bottles.

People who sell their empties keep trying to convince themselves that these literal pieces of trash — that go for $100, $200, $300 — are going to someone who’s gonna' make a lamp. Okay. If there are hundreds of empty Pappy bottles being sold for lamps, where are the hundreds of Pappy Lamps? They’re simply not there.

Sku: Have you seen examples of likely fakes of bourbons other than Pappy Van Winkle? For instance, A.H. Hirsch, the Buffalo Trace Antique Collection or anything else?

Adam: I’ve seen fakes of all kinds of bourbon, from dusty to recent. Refilled A.H. Hirsch and fake BTAC I haven’t confirmed. But I see empty A.H. Hirsch bottles selling on eBay. I think we're at the stage now that single malts were at around 15 years ago, where there were fakes invading the market, but most people were in strong denial. This is the time to learn how to be vigilant against fakes, before you end up with a collection of them.

Sku: How easy is it to make a convincing fake?

Adam: It depends what you’re faking. Pappy products and other recent stuff are very simple to fake. That’s because you can easily buy empties, and then all you have to do is refill the bottle and reseal it. That’s easy with a small amount of online shopping and resourcefulness. If I wanted to sell fake Pappy Van Winkle, I'd be up and running in a few weeks. After I sold my first bottle or two, I’d have recouped my startup costs. After that, all I need are the empties and about a minute per bottle to make it look just like new.

Sku: Are there any tell-tale signs of fakes or is it hopeless to think you can tell the difference?

Adam: I know everyone wants an easy checklist, but it’s more complex than that. In the past few years, I’ve seen over a half million dollars in “street value” of fakes. Most of that's in private collections, but some are in auctions and at retailers. Most of those have been single malts. Some are pathetically easy to identify by “telltale” signs — but only once you’ve got a trained and practiced eye.

You’re going to hear all kinds of crazy theories on how to verify a bottle. Be careful believing any of them. It’s mostly superstition and unsupported guesswork. Just like anyone standing at a craps table, after a while of feeling helpless, people think they can identify patterns where there are none.

The recent fakes — Pappy, Hirsch, etc — you’re probably not going to be able to spot, because they’re genuine bottles with real labels, resealed with identical (or virtually identical) foil or wax. But in general, consider the following:

- Does everything you’re seeing make sense? For instance, is the wear on the bottle even, or is it shiny new foil with a scuffed and worn label? Is everything correct for the time period the bottle is supposed to date from? Is the color of the liquid right? Plain common sense and logic can get you pretty far. Just make sure you don’t veer into tinfoil hat territory — plenty of legit bottles end up with torn labels and nicked foils.

- Do you know the bottle’s history? “Some guy off of Craigslist had it” is not a good history. Even retailers buy on the secondary market nowadays, so unfortunately “It came from retail” doesn’t guarantee authenticity. If a bottle comes from an ABC store in a control state, that’s great. If it came from a store in a non-control state, make sure you know your retailer.

- With vintage bourbon from 1985 and earlier, remember that you can buy tax stamps on ebay and from stamp dealers. Before you get paranoid about that, remember that nearly all the stuff that’s discovered in people’s basements, attics, and so on is going to be legit. But as the hobby continues to boom — and if people don’t stop selling empties on eBay — there eventually will be more dusty counterfeits. That means you need to know the bottle’s provenance. Get the story behind it, and pay attention not just to the answers, but to the way they answer — honestly, evasively, strangely, etc.

- If you can’t see the bottle in person, ask for very specific photos. That can be anything from certain angles to placing two pennies next to the bottle. If a person can’t provide what you specify, then either they’re trying to hide some aspect of the bottle, or they don’t even own it. Ditch the deal.

- The stuff with heat-shrink plastic-wrap over the top is the easiest to refill.

- If it sounds too good to be true, it almost always is.

- No one can authenticate by taste. Maureen Downey, the wine expert who exposed the massive Kurniawan fraud, is fond of saying this. Same thing goes for whiskey. Unless you're doing a true, double-blind comparison of suspected fakes with known legit samples, which never happens, authenticating by taste means zilch.

You’ll hear people who tasted a bottle of some extravagant rare whiskey, they'll tell you, “Oh yeah, it was DEFINITELY the real thing” because it tasted so good. That’s just dumb. I’m sure it did taste great to them, but that doesn’t mean the whiskey is what they were told it was. Even the biggest tasters tend to taste what they want to taste and what they expect to taste.

Sku: Any final thoughts about about the fake problem and what it means for the hobby?

Adam: If people stay aware and stay positive we can fight the fakers. We’ve already had a big impact, and here’s how I know.

In February, I “exposed" the fakes problem on one of the big bourbon forums. The post exploded in popularity, created huge awareness, and many people joined in to help. Eventually they even identified the name, address, and aliases of one of the suspected counterfeiters, and made it clear that the information would be passed to law enforcement.

Cut to now. Many empties on eBay are going unsold, and the ones that do sell go for much less than they did just a few months ago. Compare that to the month preceding my post, when every single empty Pappy posted on eBay was sold for big amounts. That doesn’t happen anymore. Why the big change? I think we scared one of the big fakers out of business. Maybe more than one.

The sad thing is that when I first made that post, some people delighted in trolling and causing trouble. “This is dumb! You can’t do anything!” That sort of stuff. That small but vocal minority is as big of a problem for our hobby, if not more, than the counterfeiters. So be positive and be part of the solution. DON’T SELL YOUR EMPTIES. Don’t let your friends do it and stop others from doing it. Spread the word. Stay vigilant. Don’t be a douchebag. And have fun!

And don’t read this thinking the fakes thing doesn’t apply to you. You’ll be the one who ends up owning the fakes.

Thanks to Adam for taking the time to respond to my questions.


Sam Komlenic said...

Great information and backstory. Thanks for bringing this to your dedicated audience, Sku!

Lew Bryson said...

Outstanding. Will spread the word.

Anonymous said...

Sneaky bastards! :/ Would it be possible to get facts about the incidents, please? So far the article was scaring me. I am collector (or hoarder whatever you call it :D). Is somebody trying to get the flippers out of the business? :D I'd like that! I would be and have been emotional too when somebody screwed me with a fake. It has happened to me couple times. But they were rudimentary - old bottles that were re-corcked and no federal seals. I was trusting seller's statements that it had the original content in those two occurrences. So far 99% of other sellers that I had contact with were very honest folks.

Can we get a link to that forum discussion? I want to see how those fakes look like, discovered counterfeiters methods of operation etc.

There is another market for the empties that you have not considered. Those kids/people who want to impress their counterparts, girlfriends, bosses etc. They buy empty Pappy bottles, fill it with another whiskey and then serve it at their parties as a real thing. I have done that in college when I was filling cheap vodka to Absolut bottles. I was broke and wanted to be cool. And nobody could tell the difference :D

Richnimrod said...

While I am certain that fakes, and of course, fakers exist, they are no problem for me. I just DON'T BUY SECOND HAND WHISKEY! I buy whiskey from a local retailer, whom I've known and trusted for years, and almost never get a shot at any BTAC, and even less often any Pappy; but that's OK. There are so many other GREAT Bourbons to be found at retail, and for considerably less cheddar, that I have no anxiety whatsoever about access to very nice pours. If I never get to own another bottle of Pappy or BTAC or 'whatever', I shall lose NO SLEEP. I have my bottles, some of which are rarer than others; but frankly, the most rare ones aren't often the best drinkers, anyway.

Anonymous said...

Our "hobby"? I thought I was just drinking bourbon. Now, I can tell my wife that I am constructively engaged with a hobby when I'm drinking.

Mark said...


What is your opinion regarding some of the auction sites out there? I know some are quite reputable (much more so than those dickbags at Bonhams), and thus far I've had good luck from them, I think...if I can't validate by taste I'm sunk, but at the very least it was delicious, though I haven't ventured in to the really high end stuff like Karuizawas, old Macallans, etc.

Steve said...

I witnessed Adam's post in one of the groups and followed the subsequent hundreds of comments thereafter. I was pretty cool to see what a small group of people were able to do somewhat quickly to better identify a counterfeiter. The problem sucks and likely won't be snuffed out for some time but at least things are trending upward. Props to Adam for starting this movement and to Sku for spreading the word.

David S said...

I'd like to second the request for a link or copy of the forum discussion that ID'd a faker. I'd be really interested in what it was that tipped people off.

Lear S. B. said...

Good article. Glad to hear there's a concerted fight against these evil doers! I actually have genuine rolls of vintage unused tax strips (green for bonded, pink for non-bonds, and minis) that Zeigler gave me. I'm guarding them with my life! What I want to do is to donate them to the Getz Whiskey Museum for safe, and history, keeping.

Funky Tape said...

If the trend continues, which I think it will as I haven't even seen the knock-offs yet, I'd bet Saz moves Pappy to primarily on-sale (bars/restaurants) distribution with a few bottles trickling out to heavy hitter retail accounts as perks ... while BTAC is no longer distributed, rather sold only at the distillery.

In any market bubble, fear and anticipation become the primary motivation to keep the chase going. This is only a consequence of a natural process that will end in tears for the 'bag holders.' So don't try to 'save' anything but yourself. Don't be a bag holder. ;)

Sam Komlenic said...

In a press release from Buffalo Trace today, they claim that they do not sell any BTAC or Van Winkle at the distillery, and I quote:

"Liquor sales in our Gift Shop operate under 'a Souvenir License.' This license is not a full retail liquor store license, so guests won’t be able to purchase our limited and seasonal releases in our gift shop, however this license does allow us to offer a limited selection of our products that are released regularly.

"Also, our goal with the special releases is to make them as widely available as possible across the United States, consequently, we do not sell these releases in the Gift Shop."

Anonymous said...

Can anybody post a link to the referenced forum discussion where they uncovered fake Pappy bottles, please?

sku said...

I believe the discussion was on a Facebook bourbon group. I don't know which one as there are several large ones, but the pages are not generally public.