The emergence of “professional fake-busters” in China, initially seen as a defense against counterfeit goods, has taken a troubling turn as these individuals now exploit regulatory loopholes to extort money from businesses, particularly targeting the imported wine sector.
Recent court cases reveal a pattern where these fake-busters demand hefty compensations over minor or technical labelling issues instead of genuine product quality concerns. One notable case involved Qiu Xiaozhong, who sued Interprocom Group, a leading Italian wine importer headquartered in Shenzhen and one of China’s top 50 wine importers, demanding tenfold the price he paid for 22 bottles of sparkling wine because the label did not specify the presence of “carbon dioxide” in its Chinese back label as required by the Food Safety Law.
Qiu also argued that the foreign label of CANTI sparkling wine, which contained sulfites, was not translated into Chinese, violating the “General Standards for the Labeling of Prepackaged Foods” under national food safety standards, which require foreign labels to correspond to their Chinese counterparts.
This lawsuit, which was ultimately dismissed by the court, highlights the broader issue of fake-busters using the stringent requirements of Chinese food safety regulations to coerce businesses into paying off claims rather than genuinely improving product safety standards.
According to Interprocom’s company’s legal representative, Qiu is not a consumer but a professional fake-buster. After purchasing the sparkling wine, he had contacted the company several times, suggesting that a compensation of 2000 yuan would suffice for a settlement.
Legal analysts suggest that these cases rarely concern consumer safety but rather focus on exploiting the fear of legal repercussions and the high costs associated with defending against such claims in court.
Why do professional fake-busters target wine specifically?
In China, wine industry professionals are familiar with these fake-busters.
According to the “Legal Daily,” the official newspaper of the Central Political and Legal Affairs Commission, Shanghai saw as many as 246,000 professional claims in 2023 alone, with nearly 8,000 individuals lodging more than ten complaints each. These often did not genuinely involve product quality or public safety, focusing instead on issues like labelling.
Imported wine is particularly vulnerable to these professional fake busters Searching the terms “wine” and “professional fake-buster” on the China Judgements Online website yields 376 lawsuits.
A local news website in Shandong province reported that a liquor store was sued in May this year by a fake-buster for selling wines without Chinese labels on the back, resulting in a refund and an RMB 800 settlement out of court.
The store’s owner, Mr. Cai, stated that although the imported wines did not have Chinese labels, they were definitely inspected by customs. The main reason for not having labels is that many consumers prefer to buy imported wines without Chinese stickers. Furthermore, since the Chinese sticker includes importer information, some secondary distributors prefer not to have their customers see this, leading some importers to give the labels to distributors to decide whether to affix them.
This practice undoubtedly provides opportunities for professional fake-busters.
Other similar cases often targeted by fake-busters involve importers selling “expired wines”. Up till 2006, all imported wines were required to have Chinese back labels, which would stipulate expiration date of the wine, often 10 years max. This requirement is unusual outside of China; in Europe or elsewhere, fine wines are often valued for their aging potential.
Even though the law was eventually modified to remove the drinking window, some importers still state expiration date on back labels, leaving room for dispute.
In 2023, a liquor store in Beijing was fined RMB 1,500 for selling a wine produced in 2012, which was deemed “expired” according to these standards.
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