Napa vintners harness tech to protect their wines

At Colgin Cellars, a kiss is not just a kiss.

For years, vintner Ann Colgin has sealed bottles of her sought-after wine headed for auction with a bright-red lipsticked kiss on the label, a charming, and undeniably personal, certificate of authenticity.

But with concerns growing about counterfeiters, she and other Napa Valley vintners are turning to high-tech fraud prevention so customers can feel confident they're taking home genuine wine.

Colgin, who hasn't yet had someone attempt to fake her wine and hopes to keep it that way, recently signed a deal with Eastman Kodak on a system that employs invisible markers added to inks and other packaging components.

"Our wine is essentially a luxury good and I do believe that these rare and collectible luxury goods are targets," said Colgin, whose ultra-premium wines can fetch hundreds of dollars a bottle at auction.

With the new system, buyers at auctions and other secondary markets can ask the winery to scan their labels if they have any doubts, although the measures are primarily intended to put off counterfeiters.

It's hard to gauge how wide a problem counterfeits are in the U.S. wine industry, which according to a recent industry-commissioned study pumps $162 billion a year into the economy, including grape-growing, tourism and other related impacts.

Wine Spectator magazine has reported that some experts believe as much as 5 percent of wines sold in secondary markets such as auctions may be counterfeit, although others consider that figure too high.

Unlike CD and DVD counterfeiting, wine piracy hasn't become a noticeable drain on the industry yet, so U.S. vintners are acting defensively.

Suspect rare vintages

There have been cases of counterfeit wines reported in Europe and China, and this spring there were reports that federal authorities in New York were investigating whether counterfeits were passed off as rare vintages, including some said to be part of Thomas Jefferson's collection. According to a lawsuit believed to have partly prompted the investigation, five bottles of wine - including four said to be owned by Jefferson - sold for $500,000.

Regardless of how many phony pinots are out there, it seems clear that interest in preventing fraud has spiked as new technology has become available, said Daniel Welty, marketing manager for Petaluma-based John Henry Packaging, which prints labels for wineries as well as other clients.

"It's more of a case the tools are becoming more available to combat the problem," he said.

Anti-fraud measures being explored include tamper-proof seals, radio-frequency identification chips sunk into corks and using inks that only show up under special lights.

The Kodak technology used by Colgin and three other high-end Napa wineries involves putting proprietary markers, which Kodak will describe only as a "forensically undetectable material" into things such as printing inks, varnishes, paper, etc., that can only be detected by a Kodak handheld reader, also proprietary, which incorporates laser technology.

The idea is to come up with something easy to use and hard to detect, meaning it's that much harder for counterfeiters to figure out and copy, said Steve Powell, general manager and director for Security Solutions, Kodak's Graphic Communications Group.

The John Henry packaging company is using technology developed by Silicon Valley giant Hewlett-Packard to develop multicolored codes or graphics into labels. Colors and character combinations can be constantly changed to thwart copycats, Welty said.

The codes can be microprinted, so they're visible only with magnification, or in type that can be easily read.

"It's really cool. It's really simple, and nobody can know what the next codes are," he said.

Fine wine, high price

Fine wine can be expensive straight from the shelf, but when it comes to charity affairs, such as the Napa Valley annual wine auction going on this week, prices can go sky high.

Last year's high bid was $1.05 million for five large-format bottles of Staglin Family Vineyard Meritage blend, along with a trip to France.

Like Colgin, the Staglins haven't run across fakes so far, but they decided to take a pre-emptive step and use the Kodak system on large bottles that are likely to end up being traded, said Garen Staglin.

"We want to be sure that we can give our customers the assurance of the integrity of our brand and label after we spent so much time and effort to try to accomplish what we've done over the years," he said.

In San Francisco, Jerome Zech, CEO of WineBid.com, which had $22.5 million in sales last year, doesn't think wine fraud is prevalent.

But with some high-end wines starting at $500 a bottle for pre-release prices, he's all for the industry's move toward anti-counterfeiting measures. "It'll help them and it'll help us as well."

WineBid's officials authenticate wine by only dealing with people they trust and checking bottles against a vast database, Zech said. If something seems off, "we just don't even question whether or not we would put it on our site. We would just reject the bottle."

So when someone showed up with two bottles of a famous French wine - and the glass was different for each bottle, "We go, `Are you joking? Where did you get these things,'" Zech said. "He had some story, and we just said, `Sorry.'"