Measures to protect Scotch against fakes and counterfeits

By definition, Scotch whisky must be made with only the three raw materials of water, yeast and cereals, matured for at least three years in oak casks and bottled at a minimum of 40 per cent alcohol by volume (ABV).

Sahira Rafiq, senior solicitor at Anderson Strathern, says: “Fake and counterfeit whisky is a big threat, because Scotch whisky is big business. As well as being Scotland’s second largest export after oil – with exports worth £5.4 billion last year – the sector is a major employer, supporting more than 41,000 jobs in Scotland and over 25,000 more across the UK.“It’s clear there is a captive and enthusiastic market for Scotch whisky, and unfortunately criminals will seize on that.”

Sarah McCormick, legal counsel at the Scotch Whisky Association (SWA) trade body, explains that ever since there has been distilling, there have been people trying to take advantage of the fame and reputation of Scotch.

She says: “Protecting the overall reputation of Scotch whisky in our global markets – a reputation which has been hard-won by distillers and brands over centuries – is paramount. Anything which could affect that reputation can lead to a loss in sales for the genuine product.

“We have a zero-tolerance policy for fake Scotch whisky, which can range from whisky products labelled as Scotch whisky but produced outside of Scotland, to other forms of alcohol with added colouring being passed off as whisky, to products which are matured in non-compliant casks or not matured for long enough.

“What might be perceived as a small issue could become a much larger issue over time, and so the industry is always keen to deal with problems before they escalate.”

The SWA works closely with the Scotch Whisky Research Institute (SWRI) for chemical analysis, the results of which support its legal cases. SWRI uses cutting-edge technology on suspicious samples and can tell if they fit the legal requirements to be Scotch, as laid out in the Product Specification.

Sarah says: “We would like every market in the world to formally recognise Scotch whisky as whisky produced only in Scotland, in accordance with the relevant rules, and so we are constantly striving to register Scotch whisky for recognition in new markets.

“We are also, at any given time, working on more than 100 active investigations and many more trademark oppositions, usually involving whisky products which falsely indicate a connection with Scotland.”

Sahira comments: “With the rapid rise in generative artificial intelligence over the past year, fakes and counterfeits across several different industries and sectors are at the forefront of many people’s minds.”

According to Sahira, Scotch whisky’s status as a GI gives it strong national and international protection.

She adds: “It’s also important to highlight that we rarely hear about large-scale harm caused by fake Scotch whisky in the way we do with fake vodka or other spirits in some countries. That’s largely due to the SWA’s efforts and the strength of the GI protection, combined with the proactive work of distilleries.”

Steph Innes, partner at law firm Dentons, agrees the success of Scotch has lead to issues. “What was once seen as the occasional refilled bottle is now a far more organised and international activity,” she explains.

“Recent analysis of rare and collectible Scotch has highlighted a number of authenticity concerns. Some sources report independent testing on historic drams revealing around a third of such whisky as being counterfeit. Similarly, it is estimated that around £41 million worth of bottles in secondary market circulation are likely to be inauthentic.

“Counterfeiting also affects mainstream Scotch whisky. Empty bottles, cartons, and presentation boxes are traded openly on well-known online consumer platforms, providing counterfeiters with a steady supply of legitimate looking “shells”. Industry sources suggest that up to 40 per cent of bottles circulating in parts of the secondary market could be fake or at least questionable.”

Steph warns that illicit activities undermine consumer confidence, brand equity, and legitimate investment in Scotch whisky’s reputation, saying: “Both the scale and the organisation behind counterfeit activity have increased. As Scotch has become more accessible through global retail and online marketplaces, the opportunity for imitation has widened. Counterfeiters now operate across borders and, where demand is strong, structured supply networks tend to follow.”

To tackle the problems, she points out that industry collaboration has strengthened materially over the past decade. Leading distillers work together through a dedicated counter-counterfeiting association –the Alliance Against Counterfeit Spirits – that shares intelligence and supports enforcement across key markets.

Steph says: “That work has resulted in significant seizures of fake bottles and associated packaging, and there is now a clear shift towards targeting activity earlier in the supply chain. Intercepting labels, caps and other dry goods before they are assembled has proved more effective than focusing solely on refilled bottles.”

Sarah Dacre, chartered trademark attorney with Lawrie IP, worked in whisky in the earlier part of her career and came face to face with the counterfeit issue and the detrimental effect it can have on prestigious brands.

She believes this has become a bigger issue over the years as the development of e-commerce platforms selling products directly to consumers have made it easier for counterfeiters.

“The flip side of this development is that it makes it more difficult for the brand owners to police these sales,” Sarah explains. “The counterfeiters themselves have also become more sophisticated so that it has become more difficult to spot a fake. In the early days, the misspelling of the brand names was an instant giveaway, as well the inferior labelling.”

She adds: “At Lawrie, we work with brand owners to safeguard their unique brands, designs, and innovation by assisting with putting appropriate intellectual property [IP]protection in place. This can include trademark registrations, unusual custom-made bottle design registrations, as well as protecting innovative methods to prevent products being tampered with.”

Sahira Rafiq agrees that distilleries need strong IP protection: “We would recommend businesses develop clear brand strategies and conduct regular IP audits. There is often more to protect than many brands realise. For example, Nike’s slogan is very well trademarked – if a Scotch whisky producer plans to market a product with a distinctive phrase, it is vital to protect it so that competitors cannot exploit that recognition.”

Whisky producers and the industry supply chain are increasingly investing in technology which makes it easier to track products and prove provenance, which, in turn, can also help protect against fakes and counterfeits.

Steph Innes says there is promising work underway to move authentication beyond packaging checks, pointing to one line of innovation that embeds unique markers into closures or even the liquid, creating identifiers that are difficult to copy and straightforward to verify.

Another centres on digital product passports, where each bottle carries a secure identity that records its journey through the supply chain. For higher-value bottles, Steph says more advanced systems are being tested including molecular signatures and “NFC-enabled” closures. Near Field Communication (NFC) is the same short-range tech used for contactless payments and allows a consumer to confirm a seal’s integrity by tapping the bottle with a smartphone.

An example of a producer investing in tech to track its products from “field to glass” is The Borders Distillery’s recent introduction of cloud-based technology Bottle ERP. The Hawick-based firm says this is a move which will allow it to achieve its growth ambitions ahead of the release of its first single malt.

Partnering with consultants Catalyst ERP, the distillery implemented the solution designed to streamline business and operational efficiencies from end to end. It is built to strengthen quality assurance, customer engagement and cask management.

Nathan Cahoon, chief operating officer at Borders, observes: “Being able to track and demonstrate the provenance of our whisky is more important now than ever before, and Bottle ERP allows us to do this seamlessly.”

In a separate development, a new platform called DeLux is being developed to provide full traceability, transparency, and compliance across the product life cycle of Scotch.DeLux aims to tackle the multi-billion-pound problem of counterfeit products, while changing the way brands prove their provenance and report their sustainability credentials.

DeLux founder Sylwia Fitch has worked for a number of luxury spirit brands, including Pernod Ricard and Diageo. Its tech is designed to make every cask or bottle verifiable, using a digital product passport.Sylwia says: “As well as our digital passport platform tackling counterfeits, we hope it will also help producers resonate with consumers – especially the next generation.”