Spirits Case Study

The Issue

In 2009, Authentix was involved with a program in South America to help address a spirits counterfeiting issue. With annual production of over 60 million bottles of various spirits (approx. 50 million liters), this market provided the largest source of state government revenue—over $150M in 2007 (35%).

The brand owner was experiencing counterfeiting and adulteration rates of 30-40%, putting millions of dollars in sales revenue at risk. In addition to putting the brand image at risk, this issue posed a significant public safety risk.

The Solution

To solve the issue, a program was initiated which utilized a combination of in-product, on-package marking and distribution channel monitoring. For authentication purposes on packaging, an overt feature was added as tamper evidence for consumers and a covert feature was added for official retail inspectors via handheld field verification detectors and test kits. In addition, covert features were incorporated into the spirit itself for field verification and forensic lab verification.

The Outcome

Within the first year of the program, 75 million liters of spirits had been protected (approx. 100 million bottles). More than 1300 inspectors in 28 states had inspected over 300 retail outlets. Of these, 10% were found to contain counterfeits and 5 retail outlets were investigated resulting in arrests. The brand owner experienced a 25% increase in sales over same time period.