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Chinese police take down fake Penfolds wine network

www.securingindustry.com by 29/03/2022  

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Police in China say they have busted a large-scale criminal network focused on the counterfeiting of wines claiming to be made by Australian producer Penfolds.

The enforcement operation – as reported by Vino-Joy News – took place in China's eastern Jiangsu province and uncovered more than 8,000 semi-finished and bottled fake Penfolds wine with an estimated value of around $1.6m.

The investigation into the gang was prompted by a disgruntled consumer, who reported buying a bottle of Penfolds Bin 407 Cabernet Sauvignon for RMB 699 – around $110 – at a discount to the usual price of around RMB 1,000.

The purchaser said their suspicions were aroused as the taste of the bottle was "poor", according to the report. Penfolds is a popular wine brand in China, although latterly tariffs have cut into its exports to the market.

A Penfolds investigation revealed that the bottle was counterfeit and purchased from an unlicensed retail outlet. It also discovered a workshop dedicated to manufacturing counterfeits, and estimates that more than $12m in fake wine may have already been sold to consumers in China through online and bricks-and-mortar stores.

There was also evidence that the ring were making knock-offs of Hennessy and Martell cognacs and Chinese wine brand GreatWall, according to the report.

Six arrests have been made as a result of the raid, which also resulted in the seizure of more than 64,000 items of logos, trademarks, and packaging that are suspected of infringing Penfolds' intellectual property.

There has been a series of instances in which counterfeit Penfolds wine has been seized in China, including cases in 2017, 2018 and 2021, with some bottles seized with copies of the anti-counterfeit labels implemented by Penfolds parent Treasury Wine Estates (TWE) to try to protect the brand.

Last year, Vino-Joy reported the seizure of around $20m-worth of counterfeit Penfolds wine during an operation in Guangdong, Shanghai, Jiangsu, Zheijiang, Yunnan and Guangxi.

TWE has tried to mitigate the threat of counterfeits in China through a brand protection partnership with online retail giant Alibaba, which includes membership of Alibaba's Anti-Counterfeiting Alliance, and providing training to law enforcement on spotting fakes.