Guangdong busts US$35.5m worth of smuggled wines

Police in Guangdong province have busted another major smuggling wine case involving wines valued at more than RMB 230 million (US$35.5 million), including about 4,000 bottles of  blue chip wines such as first growth Bordeaux.

Skyline of Guangzhou

According to local police, the smuggling ring was dismantled in Zhuhai, a port city bordering Macau, and the wines were funnelled into the mainland by both under-reporting the value of the wines and hand-carrying by ‘coyotes’, the parallel traders operating on the borders between the tax-free Macau and neighbouring Guangdong province, reported state news television CCTV.

The latter is a main artery for high-end wines being smuggled into the mainland, the report said.

Hong Kong and Macau have zero tax on imported wine, while crossing over to the mainland, imported wines in general pay close to 50% taxes including VAT, import tariff and consumption tax – if without any FTA agreements or punitive measures.

This is not the first time that Zhuhai has been thrust into the centre of Guangdong’s anti-smuggling campaign. In 2015, the city’s Gongbei port authority dismantled six smuggling rings that centred on high end wines, valued at RMB 108 million (US$16.7 million) in total.

According to the report, police can now use big data to benchmark imported wine prices across different ports nationwide. If a wine in Guangzhou, for instance, was reported upon entry to be worth €3, yet the same wine in Shanghai was declared as €5, customs officials can cross check the prices in their database, and demand the importing companies to provide retail prices, wholesale prices, original purchase receipts etc., if under-reporting wine value is suspected.