Alcoholic beverages fraud is not just counterfeiting
Alcoholic beverages with counterfeit trademarks are just part of the fraudulent alcoholic beverages market. Fraud can also mean giving false information about a product’s properties. Penal sanctions can be imposed on perpetrators of both types.
Producers of alcoholic beverages place various designations on their goods. One group is made up of trademarks and geographical indications distinguishing the product from others on the market. They identify the item as coming from a certain producer or certain region known for production of the specific drink (e.g. the Champagne region for champagne, or Poland for Polish Vodka). Buyers automatically associate certain features with the goods and those associations are generated by the trademark or geographical indication. When purchasing champagne, we expect a sparkling wine with luscious bubbles, and in the case of Polish vodka, a spirit distilled from traditional grains or potatoes. Another group are designations as to the composition, date of production, shelf life, or other properties. Producers are required to include some of this information on their products. They also include on their labels certain codes indicating the specific batch of goods or even individual bottles.
Both groups of designations are designed to ensure the safety of trade and consumption. Any of these designations can be falsified. Apart from civil and administrative sanctions, the law imposes criminal liability on persons fraudulently misusing such designations.
Counterfeit trademarks and geographical indications
In the alcoholic beverage industry, trademarks and geographical indications are critical for positioning producers on the market. Dishonest competitors unlawfully exploiting these designations harm the reputation of the rightful holders and their products and also pose serious dangers to the health and sometimes even life of consumers.
Criminal liability for unlawful use of someone else’s trademark applies to one who places a counterfeit trademark on goods as well as one who trades in such marked goods. Art. 305 of the Industrial Property Law provides that such behaviour is subject to a fine, probation, or imprisonment of up to three years.
In turn, Art. 41 of the Act on Spirit Drinks and Registration and Protection of Geographical Indications for Spirit Drinks imposes criminal liability, but only with respect to spirits, for marketing spirits unlawfully using a geographical indication, which is subject to a fine, probation, or imprisonment of up to two years.
Falsified indentifying marks and information about product properties
Art. 306 of the Criminal Code imposes a sanction of imprisonment of up to three years for removing, forging or altering identifying marks, or dates of production or useful life of a product. The question arises under this provision whether a trademark is also an “identifying mark.” These terms do not appear identical. Although both marks serve for identifying a good, it is an entirely different kind of identification. A trademark distinguishes a product from goods of other producers, and an identifying mark distinguishes an individual product from other products made by the same producer. An identifying mark for purposes of Criminal Code Art. 306 refers to marks identifying a batch of goods. In the case of alcoholic beverages this might be some form of bar code, bar/numerical code, or alphanumerical designation.
If information about the composition or other properties of alcoholic beverages is falsified, the producer or person marketing such goods may be held liable under Art. 97 of the Food Safety and Nutrition Act. In this case falsification is understood to mean altering the composition or properties without informing the consumer, or adulterating the product to conceal its true properties. In either case, it is a situation where the actual composition or other properties do not correspond to those stated on the packaging. In that case, the perpetrator is subject to a fine, probation, or imprisonment for up to one year.
Enforcement policy
Combating offences of this type requires the involvement of the state inspection authorities and law enforcement authorities. In Poland there is no single institution tasked with monitoring this phenomenon more broadly, and it must be strongly underlined that this is not a marginal problem. Nonetheless, the authorities are active. Every year cases of trading in alcohol of unknown origin are exposed, as well as plants bottling such alcoholic beverages. For example, such a bottling plant was discovered by border guards in Jarosław in September 2017, and 260 litres of illegal spirits were seized on the spot.
Moreover, crimes of this type are often committed across borders, making international cooperation vital. An important initiative in the fight with counterfeit and falsified alcoholic beverages at the EU level is Operation OPSON, joining forces between Europol, Interpol, and law enforcement units in individual member states.
Among other successes, in 2017 Operation OPSON VI uncovered in Tuscany the production and distribution of fraudulent wine, sold under a well-known name, also protected as a geographical indication. During the investigation it was found that the wine was sold not only in Italy, but also in other countries. And in Greece a warehouse was discovered storing vodka and whisky smuggled from Bulgaria. Nearly 1,300 litres of spirits were seized on the spot. All of these products were of unknown composition and origin.
These examples provide tangible proof that false alcoholic beverages pose a serious threat to consumer health, which in this case depends on the effectiveness of protective measures.
The array of criminal provisions that may apply in the case of fraudulent alcoholic beverages is quite impressive. But this does not seem to deter perpetrators from pursuing such illegal activity. Thus an equally important element in the battle with this phenomenon is educational campaigns and initiatives aimed at raising social awareness of the issue of fraudulent foods, including alcohol products. Such measures are conducted at the national and EU levels. Recently, in March 2018, the European Commission launched the Knowledge Centre for Food Fraud and Quality. The work of the centre is aimed at application and enforcement of food law and protection of consumer rights. The demand for such products can be cut only by making buyers aware of the risks they assume when consuming alcoholic beverages of unknown composition and origin.
Ewa Górnisiewicz-Kaczor, adwokat, Intellectual Property practice, Wardyński & Partners
