When a policeman opened the rolling door of a dingy storeroom on the ground floor of a roadside three-storey house in Sanjiao Town, he was shocked to discover an unlicensed workshop producing a huge volume of fake foreign liquor.

In an operation in June the police seized eight suspects on the spot in Zhongshan, a city in South China's Guangdong Province, including the alleged brains of the operation, a boss surnamed Lai.

The chief suspect will be prosecuted in one or two months, according to Liu Zhiwei, an official from the Guangdong Bureau of Public Security.

The police confiscated 2,589 bottles of 14 different brands of bootleg alcohol, such as Hennessy, Chivas, Martell, Remy Martin, Johnnie Walker and Grants.

They also found 13 200-kilogram barrels of raw liquor and 190,840 boxes, trademarks and supposedly counterfeit-proof labels.

Lai, 45 and a native of Gaozhou in Guangdong Province, admitted he and his workers had been counterfeiting spirits since 2001 in the storeroom.

The total value of the fake liquor produced and sold by Lai reached 8.42 million yuan (US$1.04 million) according to the authorities' preliminary estimate.

How was it made?

The bootleggers bought raw liquor from distilleries in Tianjin Municipality, Shantou in Guangdong Province and other places across the country through illegal means.

Then they collected abandoned bottles and boxes of top-grade alcohol from bars, nightclubs or restaurants. They illegally bought anti-counterfeiting labels and trademarks from companies the police declined to identify.

The bottles were sold in cities across the country, such as Tianjin, Beijing, Shanghai and Chengdu.

Lai said he contacted his clients by telephone and had never met them. He hired freight companies to transport his booze.

Wine samplers said the fake alcohol Lai mixed was perfect, in appearance and taste, and would easily have fooled ordinary consumers.

As many drinkers in nightclubs like to mix spirits with other drinks, it is very hard to tell whether the product is real or not.

The police confirmed the fake booze Lai produced is generally not harmful to health as the raw material he bought meets accepted standards.

Slightly crippled in a car accident when he was young, Lai came to Zhongshan to work in the 1990s.

In 2001, Lai decided to try his hand at counterfeiting and hired six workers, all of whom are relatives.

Lai was rumbled in January when police in Tianjin received a report from the Guangzhou Office of Hong Kong International Association of Foreign Liquor (ASIA) Co Ltd that someone was selling fake foreign liquor on a large scale in their city.

On February 3 the police rounded up a male suspect surnamed Guo, 41, and a 28-year-old female suspect surnamed Liu, both of whom are natives of Tianjin.

The police confiscated more than 400 cartons containing 4,800 bottles of imitation alcohol in the apartments rented by the pair.

Investigations revealed that since August 2004, Guo and Liu had bought fake booze of various brands from Lai in Guangdong Province for between 30 and 60 per cent of the price of the genuine product and then sold them on to about a dozen bars and nightclubs in Tianjin. It was estimated they sold 291,992 yuan (US$36,000) worth.

Guo and Liu have been arrested on charges of bootlegging and fraud, and are waiting to stand trial.

The bar and nightclub owners will not be prosecuted as their sales did not amount to 50,000 yuan (US$6,712) - the threshold standard for criminal punishment. They will be fined heavily instead.

"We were unaware of the counterfeit when we bought them," claimed one of the involved bar owners at a recent press meeting. "We bought the booze at a price just slightly lower than regular price."

However, the police doubt the truth of this statement.

Li Xiulin, vice-director of the Tianjin Public Security Bureau, said: "I believe the bar owners knew this booze was illegal and fake but played dumb because they could not resist the temptation of profits."

Detecting the source of the fake liquor, Tianjin police passed the information and material to Zhongshan police in March.

After three months of investigations, the police in Zhongshan solved the case.

Lai said he sold the fake booze at 45 yuan (US$5.60) a bottle on average and only earned 4 to 5 yuan (50 to 60 US cents) per bottle.

Lai and the other seven suspects are facing heavy punishment due to the huge amount of money they made.

According to the Criminal Law of the People's Republic of China, any producer or seller who commits the crime of manufacturing or selling fake goods with a sales amount of not less than 2 million yuan (US$247,000) is to be sentenced to 15 years or life imprisonment, plus a fine.

The police will continue their probe as the sources of the raw liquor have not been identified.

"It is a nationwide crime network and we've got to get rid of it," said Zhang Junjie, vice-director of the Zhongshan Police Economic Crimes Investigation Department.

Zhang said Zhongshan authorities will pass information to police in other areas after a further investigation.

Lai's case was listed as one of the top 50 supervised by the Ministry of Public Security in the nationwide Mountain Eagle Operation that began in November 2004 to crack down on trademark violations.

By the end of July, police around the country had solved 1,804 intellectual property rights violation cases with a sales volume of more than 1.3 billion yuan (US$173 million) and seized 3,667 suspects in the Mountain Eagle Operation.

(China Daily 09/20/2005 page5)