You wanna buy hanna baga watcha?” is a question many a foreigner gets asked on high streets in the centre of Chinese cities. The person asking will gladly lead you to a room down a back alley filled floor to ceiling with counterfeit Louis Vuitton handbags and Rolex watches. Copycat culture or ‘shanzai’ is everywhere in China. If a product is popular, it gets copied, whether it’s a handbag, shoe, MP3 player or TV drama.
Whisky is no different. The more it’s drunk in bars and karaoke clubs, the more counterfeit products enter the market. Order Chivas, Johnnie Walker or Dewar’s in a Chinese nightclub and there’s a fair possibility that what you are served will not be the real McCoy. Particularly with blends, you run the risk of either being served a cheaper version of what you asked for or something produced in a Chinese distillery that has a closer affinity to Shenzhen than Scotland. Bar managers say even if they find a reliable supplier, bottles can be switched by drivers and bar staff looking to make a quick Yuan on the side. Conscientious bars smash their empty bottles each week and record serial numbers.
So the announcement that the Chinese government will officially recognise and protect Scotch whisky as that made in Scotland was welcomed by many. But at the same time the UK diplomats were patting themselves on the back in Beijing, a shelf in Lianyungang on China’s northern east coast was being re-stocked. Here, as in other outposts far from China’s major, ‘first tier’ cities you can find, among others, Great’s whisky, a Chinese whisper of Grant’s. As the saying goes in China, “The mountains are high and the emperor is far away”, and Vince Cable, clutching his agreement, is now further away.
The importance of getting the Chinese authorities to officially recognise what makes Scotch Scotch shouldn’t be underestimated though. It took three years and the combined effort of UK Trade & Investment, the Department for Environment, Food and Rural Affairs (DEFRA), the Scotch Whisky Association and the British Embassy Beijing. Stephen Notman, the Show Director for Whisky Live Greater China knows the problems well. He says he has come across at least 15 to 20 fake whiskies in the last three years including American whiskies. He welcomes the move, giving the product the highest level of protection. But like many in the industry in China, he knows that fake whisky will always be a great challenge because of the nature of the market.
China is an important emerging market, with exports growing from £1 million in 2001 to some£80 million in 2009. China is Asia’s second largest food and drink market by value after Japan. The Chinese spirits market generated total revenues of $8.6 billion in 2008 and it is expected to reach a value of $11.3 billion by 2013. The Scotch Whisky Association investigates over 50 suspect products a year in China and says it receives excellent support from the Chinese authorities.
But many believe the sheer vastness of China, more than 3 million square miles, makes it impossible to police the production and sale of counterfeit whisky. The new rule is one thing but enforcing it on the ground will be another.
And when there are so many trademark and intellectual property rights abuses in China, why should whisky receive special attention? Perhaps because unlike something you wear over your shoulder or on your wrist it is consumed and that makes it a risk to people’s health. But it wasn’t long ago that China struggled to recognise and then stem the sale of tainted baby formula which was making children sick.
China is by no means the only developing market that has the problem of imitation whisky. The likes of India and Vietnam, and to an extent even established markets, also do. Time will tell if the appeal to create and sell copies weakens once the Chinese market matures. If it does, people at every big brand will breathe a sigh of relief, from Chivas to Chanel.