The Australian wine industry's $143 million trade with China could be threatened following the discovery of fake Australian wines in China.
Chinese entrepreneurs are counterfeiting Australian wine, including knock-offs of one of our best-known brands, Penfolds, and promoting the fakes as quality wines in shops and trade fairs throughout the country.
But it's not just big companies being targeted. One small Australian wine producer from the southern Flinders Ranges claims he has been the victim of Chinese counterfeiters.
Emanuel Skorpos of Flinders Run travelled to China earlier this month following reports that one of his wines had been copied.
He visited a wine shop in Shenzhen where he bought two bottles of his Kieras Bin 05 2008 merlot.
The wines will now be analysed in Australia. When quizzed, he said, the shopkeeper told him he could also supply other wines under the brand and in greater quantities.
Mr Skorpos fears the racket has already affected sales of his wines as well as other producers and threatens to tarnish the image of Australian wine in a country that is now one of Australia's major export wine markets.
"It's bigger than my issue," he said. "It's about Australia's export wine market. The Australian government needs to do something."
China is Australia's fastest growing export wine market. From 2004, wine exports have surged by 84 per cent annually and in the last financial year 46 million litres of Australian wine landed in China: 21.5 million litres in bottle and 23.5 million litres in bulk.
The Australian Wine and Brandy Corporation is aware of the problem.
"I'm not going to deny it doesn't happen," said Steve Guy, AWBC's general manager for compliance and trade. "It would be naive to deny that there's never been a case of counterfeit Australian wine in China, but we need evidence before we take action."
Mr Guy said if a wine labelled as Australian proved to be non-Australian it became an AWBC issue; otherwise knock-offs and abuse of trademarks and intellectual property are for individual companies to deal with.
Perhaps the highest-profile casualty so far has been Penfolds, maker of Grange. Wines labelled "Benfolds" and claiming to be Australian were seen at a trade fair in China earlier this year.
"I've seen a 'Penfolds 888' [8 is a lucky number in China] and even 'Benfolds' with the same cursive 'P' but instead it's a 'B'," said Matt Bahen, deputy general manager of Australian-owned wine distributor, The Wine Republic, in north China.
"But brand pirating is not a huge threat to our industry because, apart from Penfolds, Australian brands don't yet have levels of awareness, or aren't in the price bracket to make them attractive pirate brand candidates. There are isolated cases — but it's not our biggest threat," he said.
"Our biggest threat is cheapening 'brand Australia' with random branding in the hope of dumping more containers in China. If we start off cheap and treat Chinese consumers as fools then it's going to bite us."
The trade fair stall and its promotional material looked highly "proprietorial", according to Penfolds' Melbourne-based intellectual property lawyer, Stephen Stern of Corrs Chambers Westgarth.
It even displayed pictures of Penfolds winemaker Peter Gago.
Mr Stern and Foster's, owner of the Penfolds brand, worked with Chinese authorities and on July 1 a counterfeiting operation in Guangzhou was raided and bottles of wine seized.
The most popular exported Australian grape varieties into China are shiraz, cabernet sauvignon and merlot. These are among the most likely to have been copied.