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China busts largest wine smuggling case in recent history

vino-joy.com by NATALIE WANG02/10/2022  

According to Chinese language wine media WBO, a few Shanghai-based wine merchants including a China representative for a Bordeaux merchant “were asked to assist” an ongoing criminal investigation involving RMB 368 million (US$51.4 million) worth of smuggled wines.

The value of the wines involved would make it the largest wine smuggling case uncovered in recent years in China, and the amount of taxes evaded according to the report alone amounted to RMB 127 million (US$17.5 million).

The identity of the China representative is not identified in the report except citing his surname as Wu, nor was the identity of Wu’s employer, which was only named “a Bordeaux wine company”.

It’s reported that Wu as the China representative of a Bordeaux company has been selling grands crus classé wines to many Chinese merchants for over 10 years, including some of the country’s biggest players.

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WBO says it obtained the news on the tip of another merchant who had business dealings with Wu.

According to the report, since 2017, Wu had allegedly schemed with two other merchants to send high-end wines sourced from France and other countries into mainland China using falsified invoices and customs declaration.

They would also hire parallel traders to hand-carry tax-free wines to mainland China via ports in Shanghai, Beijing and Hong Kong-bordering Shenzhen.

The smuggling operation was exposed when some of the wines circulating in Fuzhou market were found to bear the name of a leading Chinese wine importer whose identity is not revealed.

In China, imported wine must specify importer information in Chinese on its back label. But when authorities talked to the wine importing company, it denied ever importing the wines for the mainland market.

Acting on the lead, police discovered more similar wines that are apparently shipped to China from the wine importing company’s Hong Kong warehouse. A source told WBO majority of the wines were in fact bought by the importing company from Wu’s company and stored in its Hong Kong warehouse. Wu then sold the wines to a few other merchants who hired parallel traders to smuggle the wines to the mainland.

It’s not clear immediately how involved Wu was with the smuggling operation, but sources said Wu is not currently under arrest.

The smuggling case eventually led to 39 arrests in a joint police operation that involved 222 law enforcement authorities from Shanghai, Beijing, Shenzhen and Fuzhou on August 24.