Lock and load: How closures makers are battling counterfeiters

11th November, 2019 by Tom Bruce-Gardyne

Gone are the days when closures were simply to seal bottles and stop them leaking. Today they’ve become shock troops in the war against fake spirits.

Closures manufacturers are using inventive ways to tackle counterfeiters

Behind every successful spirit brand lurks a shadowy trail of dodgy bottles. Some will be complete counterfeits, while others are merely bottles refilled with a cheap alternative. It was ever thus, as countless investigations have revealed over the years. In 1896 an analysis of whisky sold in 30 Glasgow pubs found that only two were selling genuine Scotch. More recently, there have been claims that around a third of spirits sold in China are fake, while in India bottles of Johnnie Walker Black Label are said to have at least seven lives. Empties of the revered brand, which is a virtual currency in parts of the country, are recycled by bottle wallahs until the label finally falls off.

Mathieu Prot, Pernod Ricard’s brand security and anti-counterfeiting director, faces this issue every day and he is only too aware of the ingenuity of the counterfeiters. “I have always been very reticent to express an optimistic statement,” he says. “But probably for the first time I’m becoming more confident because the big game changer is the adoption of the connected bottle, which gives us the means to leverage our consumer base. Through interaction with our consumers we are getting much stronger, so I am starting to believe that this is a war we can win.”

Spirits closures can be both luxurious and an essential part of the crackdown on fakes

NFC technology

The frontline in this war has moved to closures, with the advent of connected bottles that use short-range wireless connectivity known as near-field communication (NFC), which has many potential applications to excite brand owners. “It is the type of technology that allows people to interact without downloading an app,” says Paolo Boratto, marketing manager at Italian closure producer Tapì. “You just tap your phone onto the capsule or label and you can jump into a video or website – there are a lot of possibilities.” In March, Tapì announced a strategic partnership with Thinfilm Electronics in California. According to the accompanying press release, its Speed Tap tag is “designed to allow brands to open a direct channel to customers for delivering dynamic, real-time experiences throughout the consumer journey”.

The firm’s other device, Opensense, contains “a chip connected to an antenna, which has sense lines that can detect whether a product is in a sealed or open state”, explains Christian Delay, Thinfilm’s chief compliance officer. “It’s about giving consumers confidence in picking an authentic bottle that hasn’t been tampered with.” This is where the anti-counterfeit aspect of NFC kicks in. It works particularly well with luxury spirits compared with other luxury goods. If you buy a Rolex in a street market in Bangkok you know it’s bound to be fake from the price, which will be a fraction of the real thing, and to that extent you are complicit in the fraud. Find a bottle of Chivas Regal in the same market and you might well want some proof it is the genuine article, unless you enjoy playing Russian roulette with your health or intend to give it to someone you don’t particularly like.

This ability to recruit consumers in the war against fake spirits represents “a radical change” according to Prot, although he believes there was no need to do much actual recruiting: “The request came from them. Consumers expressed the willingness in some markets to seek reassurance that they would be getting a perfect experience with our brands.” He describes the change as a shift from a “push” to a “pull” approach. “The ‘push’ was to send foot soldiers everywhere with the hope that they will find the places where counterfeit bottles are being sold,” he says. “It’s extremely resource-intensive and you will never be successful in a very large market like China. Now we’re getting the insight directly from the consumer. We’ll never be able to have an investigator behind each and every bottle, but there will always be a consumer there.

Amorim and Tap Series

“The more you industrialise the packaging, the easier it is to be copied. The more natural, craft and authentic you look, the more difficult it is to copy.” That is the view of Amorim Top Series, whose sales and marketing director, Hugo Mesquita, believes: “What is important is the number of layers of complexity that you can add to something to make the life of the counterfeiter as difficult and miserable as possible. And that it will cost them so much time and effort as to become less interesting.”

For the Portuguese cork giant, those layers start with the natural cork itself. “The more unique and complex you make your closure, the further you get away from generic packaging, and that makes it harder to copy,” says Mesquita. He goes on to explain the geographic benefits of using a cork stopper, saying: “Industrial-scale counterfeiting is mostly done in Asia and eastern Europe. These are markets that are less regulated, less controlled and have less enforcement, so it’s easier to get away with such activity.” Given that cork forests are indigenous to the Mediterranean, and that Europe supplies 98% of the world’s needs, he reckons: “At the end of the day I don’t think it’s that easy for companies in Asia and eastern Europe to get their hands on cork to copy closures.”

Amorim’s new Tap Series adds another layer of complexity with its use of NFC technology via an embedded microchip that is loaded with data such as a serial number, production date and a link to the brand’s website. In a press release that accompanied its launch, Amorim claimed: “The biggest immediate advantage of the Tap Series closures is to help combat counterfeiting.” The release went on to quote the 2018 Alcohol in the Shadow Economy report by the International Alliance for Responsible Drinking to illustrate the scale of the problem, with illicit alcohol accounting for 34% of the Mexican market, for example.

Mesquita believes the costs should not be a barrier for spirits brands, and says: “It is worth it as an insurance policy before you’ve added in the marketing potential and ability to interact with your consumers. Right now, NFC is widely available and you can see it in every credit card. The Internet of things is here. Will everyone adopt it? Maybe not, but are people going to use more of this technology to interact with brands? Yes, I have absolutely no doubt about that.”

“We’re very proud that in China we’re the first player in the industry to adopt the connected bottle on a wide scale, and the level of engagement with Chinese consumers is extremely high.”

Every tap on a bottle generates data for the brand owner and it’s this aspect that “probably has most impact on our ability to be efficient in fighting the counterfeiters,” Prot adds. “They generate insights that we can collect and analyse, and which give us clues and intelligence as to how counterfeiters are operating in the market. We are then able to create a heat map of the counterfeiting activity.” Rather than a scattergun approach, his team can target specific bars or districts whenever something suspicious crops up.

Rigorous testing

Meanwhile, the world’s leading cork producer, Amorim, has just launched its Tap Series of bartop cork stoppers fitted with NFC technology [see box]. “We spent over three years to ensure its full compatibility, robustness, functionality and longevity,” explains Hugo Mesquita, sales and marketing director.

And rigorous testing clearly matters: “If you announce fancy technology, but for a technical reason the consumer is not able to get a reading out of the NFC, they’re going to assume it’s a fake, and that can damage the brand.”

In June, Guala Closures announced it had fitted 300,000 bottles of Malibu with the device in the US to support the brand’s Malibu Games 2019 promotion. Guala’s group marketing manager, Violette Montagnese, describes the connected bottle as “a brand tool”. She says: “It was born as a consumer-engagement system, and has other features, such as track-and-trace and certification. It shouldn’t be seen as a purely anti-counterfeiting solution.” The firm’s chief marketing officer, Paolo Ferrari, says: “The main interest from brand owners in NFC is in terms of advertising and promotion.”

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