Shanghai police crack wine counterfeiting ring

The Shanghai police department is reported to have smashed a wine counterfeiting gang, seizing thousands of bottles of fake first growths in the process.

Shanghai police officers

The six-person gang along with their leader were arrested and police discovered 684 bottles of “Margaux” and 4,000 bottles of “Lafite” worth Y10 million (US$1.6m).

The bottles were not direct copies but so-called “funny” bottles which use the names of the famous estates. Nonetheless, while not direct copies they do infringe trademark laws.

The raid was the culmination of months of groundwork, beginning with a tip-off last spring and preliminary busts which led to a haul of counterfeit labels and bottle caps.

The ringleader confessed to have been running the scam since 2010 and said he used wine from Hebei and Shandong provinces while the corking and packaging and labelling took place in Guangdong, Shangdong and Shanghai.

The wine was then distributed all over China – to at least 10 other provinces including Zhejiang, Jiangsu, Fujian, Hunan and Guangxi – to be sold to unsuspecting consumers.

The wine was priced at Y6,000 to Y7,000 a bottle when it had cost a mere Y80 to produce.

Lafite’s CEO, Christophe Salin, told Wine Spectator that the raid was “exactly” the sort of operation he wanted to see and that there was still a long list of people to investigate “or sue” for similar offences.

The police inspector in charge of the raid, Yang Lieyi, has so far conducted 900 such operations this year arresting over 1,900 people on charges of intellectual property crimes and seized over US$47m in fake goods.