Chinese wine merchant sentenced over smuggled wines

The Higher People’s Court in Guangdong province has handed down a four-year and six-month sentencing to a wine merchant for knowingly purchasing smuggled wines worth about RMB 5.74 million (US$854,680), sending a harsh message not only to cross-border wine smugglers but also complicit third-party buyers.

The harsh sentencing is bound to reverberate among wine merchants and distributors on the mainland who are sourcing wines from importers that operate in the grey market, hiring coyotes or handlers to smuggle wines from tax-free Hong Kong and Macau to mainland China for higher profits.

According to the court verdict made public recently, it says the buyer Han Zhiwei bought 3,496 bottles of 2011 Château Lafite Rothschild’s second label, Carruades de Lafite, between January 2016 and March 2017 from another wine merchant identified as Fang Minli, knowing the fact that the wines were smuggled in by Fang from Macau.

The customs at Gongbei port estimated that the smuggled wines evaded close to RMB 1.645 million (US$245,000) in taxes, which according to Article 153 in China’s Criminal Law warrants imprisonment of up to 10 years.

Meanwhile, Fang was handed a five-year sentence and a fine of RMB 1.2 million.

This is a rare case that has made public that complicit third party buyers of smuggled wines are also held criminally accountable.

Authorities in Guangdong province have stepped up efforts to crack down on cross-border wine smuggling, limiting visitor suitcase sizes and introducing heavier security checks since 2017.

Last year, police in Guangdong province busted a 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.