WineSleuth 9: Counterfeiting Ring smashed: Shandong province

This from a Contact at Linked In: Thanks, Nang.

Chinese police recently broke up the biggest wine counterfeiting ring in Shandong province

Here are the numbers:

• 10+ suspects were arrested,
• 2 criminal organizations broken up,
• 7 locations searched, 2 counterfeit wine production lines were discovered,
• 7,000+ cases, 40,000+ bottles, 200 tons of semi-finished wines were found,
• with a value of RMB ¥200M (not sure whether its retail or production value).

These counterfeit wines, primarily targeting expensive Australian and French wines, are sold in Beijing, Shanghai, Tianjin, Guangzhou, QingHuangDao (秦皇岛), etc.

According to a CCTV report, the costs per bottle average about RMB ¥4, the counterfeiters sell them for about RMB ¥20, retailers sell them between RMB ¥400 – RMB ¥500, some as high as RMB ¥900+ per bottle.

So, here are some questions to which Nang seeks answers: 

1) Are Chinese consumers buying these expensive wines just BECAUSE they are expensive (status and/or face 面子 thing)?

2) Do these Chinese consumers know they are buying the counterfeited wines?

3) How does one protect one’s self from buying counterfeited wines?

4) How do you know you are buying the real thing?

5) Are wineries partly to blame for allowing this type of criminal activities?

6) How would this incident affect the overall China wine market? And particularly these counterfeited wineries and labels?

7) Are there lessons (for wineries, labels, consumers, etc.) to be learned from this incident and become smarter?