A Chinese company was busted by the market watchdog of Chengdu for advertising counterfeit Chateau Latour on live-streaming platforms in Chengdu, southwest China.
The Administration for Market Regulation of Chengdu carried out a spot check on a Chengdu-based company, which sells wines through live-streaming platforms, after receiving complaints from netizens, Chinese media WBO reports.
According to the media, the company has been selling a counterfeit wine labelled “RONGHE VALLEY DE LATOUR” during its live-streaming sessions and e-commerce platforms. The wine label bears close resemblance to Les Forts de Latour, a highly rated Pauillac wine produced by Bordeaux’s first growth Chateau Latour.
The counterfeit wine was priced RMB 1,298 (US$204) for 6 bottles, averaging around RMB 216 (US$34) per bottle, while a bottle of 2014 Les Forts de Latour is priced at RMB 3,680 (US$579) on the online store of COFCO Wine & Wine on JD.com.
Château Latour is one of the most renowned wine estates in Bordeaux and the world with a long history of growing vines since 1331. The winery sitting in the southeast corner of the Pauillac has produced some of the most expensive and powerful Cabernet Sauvignon dominant wines for decades.
Les Forts de Latour is its second wine produced by the younger vines of the Enclos vineyard. The French estate also makes a third wine, Pauillac de Latour, besides its grand vin and second wine.
Authorities flagged a few fake advertising and falsifying wine information regarding the wine sold by the company. The wine in question was in fact bottled outside of France but the company was misleading consumers by telling them the wine was produced and bottled in France.
The company has also violated other regulations for displaying insufficient information on wine labels, and failing to present essential trade materials including customs declaration and trademark registration certificate.
The prompt action of the Chengdu authority was applauded by many wine merchants in China but it also raises questions about due diligence of live-streaming platforms.
In China, live commerce, the combination of live streaming and e-commerce, is expanding rapidly especially during the pandemic when physical stores are shut down. Sales generated from live-streaming are expected to reach US$423 billion by 2022, McKinsey consulting firm estimates.
With the help of a live commerce model, merchants can start promoting their products and directly interact with consumers anytime they want through video streaming platforms such as Douyin and Kuaishou.
The low-cost, fast and lucrative sales model provides incentives for fraudsters to sell fake products or even re-label cheap products with premium brands to generate huge sales.
In the fast-evolving Chinese market, fake wines circulating on emerging sales channels may add further challenges to major wine producing regions like Bordeaux in protecting their profits in China in the future.
Although a regulation introduced on May 25 last year states that the live-streaming platforms have to sign an agreement with the operators to ensure the legitimacy of the content and goods, it remains a difficult task for market authority to supervise the whole process and crack down every counterfeit goods.
The knock-off Les Forts de Latour were seized by Chengdu authorities and a furter investigation on the Chengdu company is ongoing.