Chinese police seize 14,000 bottles of fake Penfolds

Police in Shanghai have arrested 13 people after discovering 14,000 bottles of fake Penfolds wine destined to be sold through Alibaba’s Taobao – China’s version of Ebay – as well as pubs and karaoke bars.

Sure success: Penfolds’ adopted Chinese name, Ben Fu means “Chasing Prosperity”

Police made the discovery following a three-month investigation, prompted by a complaint to Alibaba from Treasury Wine Estates, which owns the Penfolds brand.

As reported by the Sydney Morning Herald, the company’s suspicions were raised when it emerged that some retailers were charging “extraordinarily low prices” for Penfolds wines on Taobao, in which individual companies can set up their own branded “flagship stores”.

At a press conference held on 13 November, Alibaba confirmed that 13 suspects had since been detailed, including one wine dealer, Mr Dai, who had been selling fake Penfolds for 200 yuan ($40) per bottle online, when it should retail for 600 to 3000 yuan ($120 to $595).

A further 2,000 bottles of wine were found in a warehouse in Shanghai, with another 10,000 bottles and 10,000 fake labels discovered two weeks later at two warehouses in Xiamen. Police also seized another 2,000 bottles when they arrested five online retailers selling to pubs.

In a statement, Treasury Wine Estate said: “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”.

Earlier this year Penfolds refuted claims that at least 80% of Penfolds wine sold online in China is fake, after an exposé written by a social media opinion leader called ‘Lady Penguin’, whose real name is Wang Shenghan, went viral.

Treasury denied the claims made in the article, stating that “any reference to suspected counterfeit Penfolds wines sold on e-commerce platforms such as JD.com and other sales channels, including imagery used as part of the article, are completely incorrect and unsubstantiated.”

Counterfeit wine is a particularly pervasive problem in Asia with many premium wines smuggled into China through various illegal channels. Guangdong province in southern China, bordering tariff-free Hong Kong and Macau, is commonly regarded as an entry point and dissemination centre for smuggled wines with a network of ‘cayotes’ or parallel traders carrying wines cross border.