Chinese Police: Your Supplement Pills may be Fake
Jul 23, 2018

Police in southern China have seized more than 30 million yuan ($6.3 million) worth of counterfeit products, including large hauls of popular Australian-branded wines, vitamins, foods, and cosmetics.

In two separate operations, police confiscated fake Penfolds wines and Swisse and Blackmores supplements, among other products.

Guangdong Police said in a statement they “destroyed” four criminal groups comprising 22 suspects during the investigation into the fake supplements over the past two months.

A dozen of those suspects have been charged and further investigations are underway.

In the other case, police said they seized about $2 million worth of wines and dismantled “a criminal chain” of 13 suspects who sold cases of fake Penfolds mixed with real bottles.

Police said the criminal chain formally registered companies that were in charge of different stages of the operation, and mostly sold the counterfeits through e-commerce websites and social media platforms including WeChat.

Many counterfeit products have been sold through e-commerce and social media platforms.

Some counterfeit products sold for a 1,000 per cent profit

Local paper The Southern Metropolis Daily quoted Guangdong Police as saying that the criminal groups used tag lines such as “overseas direct sales” for products from Australia, and “direct postage from overseas and franchise stores”, to attract customers.

Blackmores vitamins are popular with daigou shoppers.

Police added that some counterfeit products reportedly made about a 1,000 per cent profit, even though they were selling for a 50 per cent discount compared to the real product.

For example, the criminal chain selling fake Penfolds wines reportedly bought generic wines for some 19 yuan ($4) and sold them as the famed Australian brand for 200-300 yuan ($42-$62), which was significantly cheaper than the 600 yuan market price ($125).

A spokesman for Penfolds owner Treasury Wine Estates encouraged customers to seek out authorised retail stores to buy their wines.

The company’s chief executive, Mike Clarke, told the Australian Financial Review earlier this year that it would stamp out operators who were producing copycat Penfolds wines.

The company has reportedly set up an internal investigations team and is working closely with authorities in China and Australia.

Counterfeiting rife as emerging middle class flexes spending power

The criminal groups mixed original Penfolds with fake ones

China’s rising middle class is driving increased demand for Australian-sourced foods and produce and a huge phenomenon known as “daigou”, fuelled by a network of tens of thousands of shoppers who buy goods in Australian stores to send to relatives, friends and social media followers in China.

However, many Chinese consumers are being cheated, with fake products offered by dishonest daigous who not only sell knock-off products but also attach fake documentation purporting to show the products were bought overseas.

The fake Penfolds came complete with anti-counterfeiting labels.

An Austrade spokesman said while there had been significant improvement in the ability to register and protect intellectual property in China, Austrade was aware of companies that had still suffered commercial losses.

“That includes, where possible, registering trademarks, patents, copyright and trade secrets with relevant Chinese agencies.”

Sophisticated anti-counterfeit and traceability technology is also providing new solutions, the spokesman said.

He pointed to the Adelaide-based Beston Global Food Company, which had developed a three-part traceability, anti-counterfeit and global e-commerce platform, in part based CSIRO technology.

“The system allows consumers to buy online and offline, trace the origin of products, and verify their authenticity,” he said.


Source: ABC News