November 16, 2017 – Shanghi, China
Based on complaints from Treasury Wine Estates, the official distributor of Penfolds wine from Australia, the Chinese police launched an investigation into wine offered for sale at a discount on Alibaba’s online flea market Taobao. The complaint by Treasury Wine Estates was filed with Alibaba after an Executive noticed that the more than century’s old brand Penfolds was being sold at a lower price than export price. After a 3-month investigation by Chinese Police, a raid was launched that netted 13 suspects and 14,000 bottles of fake Penfolds Wine and 2,000 assorted bottles of other fake wines.
Among those arrested was Mr. Dai, a wine dealer, who was selling the fake Penfolds online at a fraction of its intended retail price. Mr. Dai was selling bottles of Penfolds Wine for $40 USD, while the retail market in China sells Penfolds for $120 USD to $595 USD per bottles. At a press conference staged by the Shanghi Police, more than 2,000 bottles of other fake wines confiscated from Mr. Dai’s warehouse were displayed with labels that were blocked out.
Days after the raid on Mr. Dai’s warehouse police targeted two warehouses in Xiamen run by Mr. Su, who was identified as a supplier. At the warehouses run by Mr. Su, police seized 10,000 counterfeit liquor bottles along with 10,000 fake labels. Mr. Dai was interviewed by Chinese Reporters under the supervision of the police. Mr. Dai explained the operation like this, “so they are not fake wines, they bring no harm to the human body”, he explained that Mr. Su had sourced red wine from overseas and re-bottled it in the confiscated counterfeit bottles.
Treasury Wine Estates is a top wine importer in China. As recently as last August, The Chief Executive of Treasury Wine Estates, Michael Clark revealed that the demand for the quality wines that they distribute in China is so great that they cannot keep up with it. He explained that they have seen sales of higher end Australian Wines such as Penfolds, Rawsons Retreat and Wolf Blass grow at 33% year over year. Operations such as the Shanghi Police busted mimicking Penfolds is detrimental to the brand integrity of these sought-after wines.
The China Branch of Treasury Wine Estates applauded the efforts of police in making the seizure of the counterfeit wine. Treasury Wine Estates China issued a statement released at the press conference held to announce the arrests and display some of the confiscated wine, “Treasury Wine Estates China continues to increase our investment behind brand protection in China. Importantly, legitimate sales of TWE’s quality wines remain be extremely strong – a great recent example of this is the record-breaking Singles Day online shopping event in China involving Alibaba and a number of our e-commerce partners which saw our sales growth increase significantly through our own-managed platforms”
Foreigners visiting China should remain vigilant when consuming alcohol. With the Late Spring discovery of a Fake Budweiser Plant, and the early Spring seizure of 20,000 bottles of Fake Carlo Rossi Wine, it appears that China has a significant fake alcohol problem.
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