What Types Of Whisky Fraud Are There? Let Me Count The Ways
Every type of fraud can be applied to any product or commodity, including whisky. There are countless ways to fall victim to fraudsters, buying a fake bottle of whisky is just one of them. History tells us that improved legislation is the first step to tackling fraud. So, what else can we learn to prevent another 150 years of whisky fraud?
Common Cask Fraud
Reporting on cask selling fraud has crossed over from specialist industry titles to the mainstream UK press. This poorly regulated practice is so ubiquitous that it is commonplace and even becoming slightly boring, but it is also a genuine problem. At best cask mis-selling is a loose pyramid scheme depriving people of their pensions and flooding the market with overpriced poor quality immature spirit. At worst, it’s devised specifically to defraud victims and simultaneously launder dirty money.
Cask fraud is nothing new though, similar schemes crop up every single decade. As early as 1880 John Robert Whyte Anderson, Distiller at the Talisker Distillery, Skye was convicted of several charges of ‘falsehood, fraud, and wilful imposition’ after spending 1877 and 1878 selling hundreds of gallons of whisky that he neither possessed nor had ever even been put into cask. Selling imaginary whisky is one of the oldest tricks in the book.
Counterfeit Whisky And Brand Protection
There’s a game you can play next time there’s a news story about a counterfeit operation being bust. Look out for two things. Firstly, the well organised crime will no doubt originate from a jurisdiction with unsatisfactory money laundering and terrorist financing controls.
The second thing you’ll notice is that the names of the counterfeited brands will remain discretely undisclosed. Spirits producers might be working hard to protect their brand, but they don’t do it in public. No brand likes to announce that they have fallen victim to counterfeiting for fear of undermining consumer confidence and potentially damaging their own brand.
Prosaic Problem of Refills
The huge growth in the secondary market for spirits, where highly prized, old and rare collectable bottles are traded for unimaginable sums, is on high alert for genuine bottles refilled with lower quality liquid. The best auctions and traders now employ external authenticators, while others attempt to authenticate bottles themselves. The bigger challenge however is the age-old practice in bars and clubs of refilling branded spirits bottles with cheaper generic ones, and it remains a global problem.
Whisky and spirits producers are in an arms race of constantly evolving technology to tackle counterfeiters. Twenty years ago Diageo announced the launch of a portable spectroscopic authentication gadget which used ‘ultra-violet technology’ to test the authenticity of whiskies being sold in the on trade. News on these and other gadgets may have gone quiet since then but we can assume that technology is still in use by trading standards authorities and whisky companies today.
DIY Drams
Returning to the subject of ‘things were no better in the old days’, in 1922 G Haskell, Dr of Chemistry published a series of recipes in his book ‘In Vino Veritas. Wines, Liqueurs and Brandies (250 recipes)’. The recipes were intended to encourage ‘every wine merchant to produce his own liqueurs’ using his own brand of spirits essences. ‘By their qualities’ he explained ‘the liqueurs will be equally as good, and in most cases better than those produced elsewhere’.
The recipe for artificial Cognac is given as follows:
¾ Ib. Aether Acetic
½ Ib. Spirit Aethrens Nitrosi
8 ¾ litres real French Cognac
½ Ib. Tincture Quercus Cortic (from 1Ib. Of Cortic Quercus and 2Ib of Alcohol).
To be mixed with a quantity of purified alcohol, so as to obtain 165 litres of liquid at 54%.
‘Whisky’ the book explains ‘is nearly of the same composition as brandy, but not as strong’.
Truths About Whisky
So why does whisky fraud matter? Here’s one cautionary tale. In 1876 four Irish pot distillers Messrs John Jameson & Sons, William Jameson & Co, John Power & Son, and George Roe & Co (all based in Dublin) were attempting to protect their industry from ‘sham whisky’. First they issued a pamphlet entitled ‘Dublin Whisky Genuine & Spurious’. Then in 1878 (incidentally, while Anderson was committing his whisky cask fraud) the same four Irish distillers published ‘Truths About Whisky’, but only to protect the traditions of a particular type of pot still distillation.
History tells us that the campaigns failed catastrophically. Instead of protecting the authenticity of whisky against fraud, resources went into demonising their more commercially successful (continuous distillation) competitors in the north. The general view in the trade is that this campaign did far more harm to the Dublin distillers than good. At the time of its publication there were 28 distillery companies in Ireland. By 1906, there were four.
It took another eighty years before a new distillery, Cooley, was founded in 1987 by John Teeling. It became the first new independent whiskey distillery in Ireland to break through. After that the Irish Whiskey Association (IWA) was created in 2014 to protect the category globally. The Irish whiskey landscape has evolved significantly since then and at the last count there were over 40 operational distilleries in Ireland.
The Famous ‘What Is Whisky’ Case
The Irish and Scottish whisky industry continued largely unregulated until 1908/9 when the ‘Royal Commission on Whiskey and Other Potable Spirits’ was established to attempt to define ‘What Is Whisky?’ Even then, the focus remained on industry infighting rather than consumer protection. As a result, the ‘Scotch’ whisky available on tap in bars continued to be as likely an unaged spirit made from any variety of ingredients.
Eventually The Wine & Spirit Brand Association (which later became the SWA) was created in 1912, however, the first definition of Scotch in UK law was only secured as recently as 1933. Even on 27 February 1936 the Chancelor of the Exchequer, Mr Chamberlain, was asked in UK parliament whether he was aware that ‘cheap spirits from Hamburg, Rotterdam and Spain are being added by importers to so-called Empire wines and wine cocktails’ to be ‘sold as whisky?’ The Chancelor responded that ‘the matter is kept under constant observation, but I cannot say more at present’. It wasn’t until the 1936 Finance Act that it was felt necessary to legislate against practices of passing off.
Japanese Whisky, Another Cautionary Tale?
Ever since 1940, when the Liquor Tax Law was enacted by the Japanese government to raise tax revenue to fund the war effort, it has been accepted that Japanese whisky could be made without even the inclusion of authentic whisky. Depending on the tax ‘grade’, whisky in Japan can be made with imported whisky or just neutral grain spirit.
In the 1960s and 1970s bulk exports of Scotch helped Japanese producers improve the quality and reputation of their blends, although this practice was never declared to consumers. It was not until 2021 that a new industry body ‘The Japan Spirits & Liqueurs Makers Association’ (JSLM) announced publicly the extent to which the practice had continued. New rules were introduced from 2024, one of which, is that a bottle cannot be labelled ‘Japanese Whisky’ unless it is in fact Japanese Whisky.
How To Protect Yourself from Whisky and Spirits Fraud
Despite all the legislation, and all the work from spirits brands, it is incumbent on consumers to protect themselves from fraud. So, what’s the best advice we can give to help you protect yourself from getting scammed? It depends on what spirits you’re buying, and where, but some general rules apply.
Here are eight things you can do to avoid fraud when buying and selling whisky and spirits:
Caveat emptor – buyer beware. The competitive market of specialist whisky auctions means that many have tightened up their own policies and are withdrawing fakes from sale, but still check the small print. Do they have a fraud policy?
Do only ever buy and sell through reputable sellers with traceable experience in the specific bottles you’re buying or selling. It’s not impolite to ask questions. If you’re not happy with the answers you’re given, walk away
Don’t buy whisky from someone you met on a social networking site. You might as well buy it from a bloke you just met in a pub. You’ll find yourself with little or no protection against fraud
Do get an expert to inspect questionable bottles on your behalf (NB your pal who ‘drinks a lot of whisky’ is not an expert in this context)
Don’t take the seller’s word for it and don’t be bamboozled by detailed explanations. Do your own research. For instance, a bottle or cask of whisky that isn’t fake may still be overpriced against market value. Equally be just as concerned if it’s suspiciously cheap
Do a quick check online to see if the people you’re trading with have ever been involved in fraud, even in a different industry. Conversely, if you can’t find independent information about them online that’s also a red flag!
Don’t take the risk on a pre-1900 bottle unless you are a high stakes gambler. Conclusive proof that its contents are genuine will likely elude you
Finally, as the old saying goes. ‘If it’s too good to be true it’s probably international organised crime originating from an under regulated region funding terrorism and armed conflict.’
Isabel Graham-Yooll
