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Smashing solution to China’s imitation game
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Australian wine producers are smashing their empty tasting bottles in China in a last-ditch effort to prevent forgeries and fakes.
The threat of forgeries are among the many risks wineries face when making a push to export into the Asian nation, with trademark theft and squatting another big concern for vintners.
Oliver’s Taranga Vineyards winemaker Corrina Wright said the push into China was “difficult” but their links with a Western-educated distributor in Hong Kong had helped to pave the way.
“We worked with translators and trademark lawyers to get our name translated correctly and get it trademarked but the fact is there is lots of copying,” Ms Wright said. “The likes of Penfolds and other big-name wineries have a terrible time — they have to smash all their bottles after they do tastings.”
“They have tried to come up with all these technological prints on the labels or whatever to make them secure but as fast as they can develop them, they can be copied,” the McLaren Vale vintner said.
In the 12 months to September, Australian wine exports to China increased by 47 per cent to a record $313 million, driven by demand for wines in the higher price points.
Wine forgeries are supported by an industry of importers, distributors and bottle scavengers who onsell empty premium wine bottles to be copied or re-used.
Wine Australia marketing general manager Stuart Barclay confirmed high-end wine labels were smashing their bottles, saying French chateaus were also resorting to that activity.
“It’s one way of guaranteeing you’re not leaving an opportunity for somebody to go and fake a bottle,” Mr Barclay said.
But the threat of fakes and trademark squatting were not unique to China, and Australian wine producers needed to be aware of the risks inherent in exporting to any country, he said.
Mr Barclay said it was unlikely the recent instability in China’s stockmarket would affect Australian wine.
“China has seen a significant surge of activity at the moment, driven by the free-trade agreement,” he said.
“We’re expecting contained growth going forward, partly because of the FTA but also because of the change in the value of the Australian dollar versus the US dollar.”
NDA Law intellectual property lawyer Paul Gordon, who has represented several Australian wineries in legal cases over trademark in China, said vigilance and thinking ahead were the keys to successfully exporting wine.
He warned that it was easy to get “very snookered” if you were not educated and prepared.
While registering a trademark would set a producer back about $2000, litigation could cost hundreds of thousands of dollars, he said.
“Unlike the Australian system which is based on use of a trademark, in China whoever filed their trademark first has ownership of it so even if you are in China using your brand before that trademark was registered, you could be held to be infringing that trademark just because they got in before you,” Mr Gordon said.
“There are helpful distributors or wholesalers in China who say don’t worry about registering your trademark and then they register it in their own name for your brand.
“That works out perfectly well until you want to change distributor and realise you don’t have ownership of the trademark that you’ve been marketing under.”