China Uncovers ¥310 Million Smuggled Wines at Macau Border

The Chinese government has recently unveiled a major wine smuggling case worth RMB 310 million (US$42.5 million), marking one of the most significant busts in recent years.

The ringleader, identified as Zhuo, smuggled premium wines, including Penfolds and Château Mouton Rothschild, from Macau into mainland China using “parallel traders” (locally known as “water guests”). Zhuo was sentenced to 12 years in prison.

Zhuhai Intermediate People’s Court heard the case and delivered the verdict against the smuggling group led by Zhuo. From January 2022 to March 2023, Zhuo ordered wine, spirits, and other goods from various overseas suppliers. These suppliers then coordinated with “water guests” to smuggle the goods by hiding the items in luggage and underreporting their value. With a total worth of RMB 310 million, the case is the largest wine smuggling operation reported by mainland authorities in the past two years.

It’s not clear if the wine suppliers who arranged the smugglers outside of mainland China would also be implicated in the investigation.

To conceal the illicit profits, Zhuo funneled the money through multiple bank accounts under different names, later converting the funds into cash or using them to place additional orders. Authorities disclosed that Zhuo made RMB 42.84 million in profits from the smuggling operations.

Images provided by Gongbei Customs revealed that most of the smuggled wine was Penfolds, along with classified Bordeaux wines, including second label from Château Mouton Rothschild.

During the period when the crime was comitted, Australian wine was subject to steep anti-dumping tariffs in mainland China, ranging from 116.2% to 218.4%. At the time, a bottle of the popular Penfolds Bin 407 could fetch over RMB 1,000 in the mainland, while the same wine could enter Macau duty-free, creating a vast price differential.

Zhuhai, A Hotbed for Smuggling

Zhuhai, located near Macau in Guangdong Province, has long been a hotbed for smuggling activities. The city’s proximity to Macau and the high volume of traffic through the Gongbei Port create ideal conditions for illegal trade. During the 2024 summer holiday, more than 20.6 million people and 510,000 vehicles crossed the border between Guangdong and Macau, with an average daily flow of nearly 327,000 passengers. Smuggling syndicates often exploit this heavy traffic by employing frequent cross-border travelers to transport small quantities of goods, making it more difficult for customs to detect.

This case mirrors several other large-scale wine smuggling busts in recent years. In 2022, Gongbei Customs’ anti-smuggling unit conducted a coordinated crackdown across Zhuhai and Zhongshan, arresting a gang led by Lin and Shi. Their operation involved smuggling Penfolds, Maotai, and Japanese whiskey brands from Macau, with a total value of RMB 135 million.

In 2023, the Shanghai High People’s Court disclosed a smuggling case involving Shanghai Yeguangbei Company. The ringleaders, Huang and Zhang, used similar tactics, hiding and underreporting wine shipments from Hong Kong and France, evading taxes of RMB 14.98 million.