Partners jailed, fined for selling wine with fake labels

A couple in the bonded area of Yantai, Shandong province, have been sentenced to prison with fines of more than 1 million yuan ($161,100) for making and selling wines using counterfeit labels of internationally renowned trademarks.

The prosecutor said the case was the largest scale of its kind in the area.

The couple started a company in 2009 using their own brands. They bought bulk wine from overseas, bottled it and labeled the products with their own trademarks.

Business was hard until 2010 when company chairman Xu Weijiang learned that some other wine companies were making a profit by using fake trademarks, and that there were people who specialized in making and selling counterfeit labels of famous international brands.

Xu decided to do the same.

The company started to purchase bulk wine from South China, along with counterfeit wine bottles, labels, caps and corks, to produce fake wines using the production line it already had.

It then sold the products both locally and outside the city.

The brands counterfeited included Penfolds and Chateaus Lafite, Mouton and Beychevelle.

"The wines for sale were priced between 10 yuan and 200 yuan, but inside the bottles was actually the same stuff, which was bought at about 18 yuan a kilogram," said Cui Hongyan, an official from Yantai's Zhifu district procuratorate. "They looked very much like the real thing. They even had an anti-forgery code."

Local police found unsold wines worth more than 235,000 yuan in the company's warehouse, all of which had faked trademarks. Another 1.6 million yuan in wines had already been sold.

The company had a complete chain from production to delivery and sales.

Jiang Feng, deputy chief of the procuratorate, said it had dealt with cases of counterfeit wine trademarks before, but most involved local brands and none were on such a large scale.

The procuratorate initiated a public prosecution in July 2014. According to the court ruling, the company was fined 1 million yuan and Xu was sentenced to four and half years in prison and fined 900,000 yuan. His wife and six other partners also received prison sentences of between two and three years with fines from 6,000 yuan to 200,000 yuan.

Jiang said the case reached the standard of a criminal investigation via a cooperation mechanism between the procuratorate and a number of other local agencies including the industry and commerce administration.

The cooperation was established in August 2011 to share information among different government departments and integrate administrative and judicial enforcement.

"Thanks to the mechanism, the procuratorate will obtain more clues and law enforcement will work strictly," said Liu Liangyu, a lawyer at Shandong Jiafu Law Firm, adding that the case is an example that reminds companies that intellectual property violation can lead to criminal penalties.

zhangzhao@chinadaily.com.cn

(China Daily 08/05/2015 page17)