Chinese police have busted their second major Penfolds counterfeiting ring in less than six months.
In November, more than 14,000 bottles of counterfeit Penfolds wine were seized by police in Shanghai, following complaints from Treasury Wine Estates to Alibaba that some of its retailers were charging “extraordinarily low prices”.
The fake Penfolds wine was being sold through Alibaba’s online flea market Taobao, while five online retailers were selling it to pubs and karaoke bars.
In the latest haul – one of the biggest so far of counterfeit liquor, police in central China have seized more than 50,000 bottles of fake Penfolds.
A raid on a warehouse in Zhengzhou uncovered more than 8300 cases of Penfolds wine worth 18 million yuan ($3.7 million).
“Treasury Wine Estates applauds the efforts of the Zhengzhou Jinshui Public Security Bureau in delivering this win against counterfeit operators, as announced yesterday in China – this is a significant step forward in helping combat illegal operators,” the company said in a statement emailed to The Australian Financial Review.
“TWE China continues to work tirelessly with its local partners, brand protection agencies and local authorities to protect its intellectual property rights and to ensure its portfolio of premium brands has its integrity preserved at all times. TWE continues to increase its investment behind brand protection in China.”
One local newspaper report said police were tipped off after a consumer bought a case of red wine and complained about the taste.
“TWE recommends for consumers to buy its products via authorised channels including Penfolds Flagship Stores, major retailers in China and online authorised stores on Tmall and JD.com,” the company added.
It’s not just copycatting that’s the issue
The fake alcohol isn’t just a financial issue, it can cause serious health problems for anyone tricked into buying it.
“Drinking fake alcohol is dangerous – you just don’t know what you’re consuming,” Dr Bernhard Schwartländer, the WHO’s representative in China, told The Guardian last year. “Where counterfeit alcohol is made from poor quality ingredients or toxic industrial chemicals, consuming it could lead to serious acute illness or worse in the short term, and potentially a host of medium- and longer-term health problems.”
Oliver agrees: “If someone in China drinks a fake bottle of your brand and dies, that will end up all over the media and you’re cactus, even though it’s not your wine. I see a day anti-counterfeit technology will become a dominant form of marketing as well as a means by which consumers can be satisfied they’re getting the real McCoy.”
The Guardian also noted: “Tax rates on alcohol imports to China are high. Booze bottles brought into the country are supposed to carry import stamps that serve to protect legitimate importers’ goods from being replaced by counterfeiters, as well as to prove their legality, but many criminals are one step ahead … counterfeiters were getting very good at removing unique identifiers that brands place on their bottles.”
Australian company YPB Group has created invisible tracer technology that can be mixed with paint, plastic or ink and applied to caps, corks or labels, to enable retailers and consumers to check bottles for authenticity.
YPB Group executive chairman John Houston says global counterfeiters are growing more sophisticated at ripping off both consumers and manufacturers.
“Consumers are often not getting what they think they are buying and manufacturers’ brands are at risk,” Houston says. “Previously Australia was pretty insulated from it but it has become a sweeping trend because Australian products are so attractive to the rising middle class in China.”
