China Dismantles Massive 260 Million Yuan Counterfeit Baijiu Network

Chinese authorities have dismantled a major counterfeit liquor network that produced and sold fake baijiu worth 260 million yuan (approximately $36 million), targeting well-known brands through sophisticated imitation of packaging, labeling, and aging claims.

The operation, uncovered in Lüliang City, Shanxi Province, led to the seizure of over 10,000 bottles of counterfeit baijiu, including fake versions of premium brands such as Jiannanchun and Wuliangye. Investigators found that the counterfeit operation used high-resolution printing to replicate authentic labels, applied artificial aging techniques to new liquor, and falsely advertised products as “28-year-old aged baijiu” sold at inflated prices through live-streaming platforms.

According to the Economic Reference News, the criminal network operated across multiple provinces and relied on a division of labor: some members sourced low-cost base alcohol, others handled labeling and packaging, and a third group managed online sales through e-commerce and live-streaming channels. The fake products were often marketed as rare or vintage baijiu, exploiting consumer trust in aged spirits and limited-edition releases.

The Beijing News reported that the case involved more than 20 suspects and revealed a well-established supply chain for counterfeit baijiu, from production of fake liquor to distribution via social media influencers. Authorities noted that counterfeiters frequently used terms like “cellar-aged” and “vintage blend” to justify prices far above market value, with some bottles selling for as much as 268 yuan despite containing newly distilled liquor.

China’s State Administration for Market Regulation has intensified oversight of the baijiu sector in recent years, citing concerns over brand infringement, consumer safety, and market distortion. Counterfeit alcohol not only violates intellectual property rights but also poses health risks due to unregulated production processes and potential use of industrial ethanol or harmful additives.

Industry analysts say the persistence of fake baijiu reflects both the high profitability of counterfeiting premium spirits and gaps in authentication systems, particularly in online sales where verification is difficult. While major baijiu producers have invested in anti-counterfeiting technologies such as QR codes, holographic seals, and blockchain-based tracking, counterfeiters continue to adapt by replicating these features or exploiting loopholes in less-regulated platforms.

The dismantling of this network underscores ongoing challenges in protecting China’s baijiu industry, which remains a significant cultural and economic asset. Premium baijiu sales contribute substantially to the profits of state-backed enterprises like Kweichow Moutai and Wuliangye Yibin, making brand protection a priority for both corporate stakeholders and regulators.

As of the latest update, suspects in the case are under investigation for trademark infringement, fraud, and illegal business operations. Authorities have urged consumers to purchase baijiu only through official channels and to verify product authenticity using brand-provided verification tools.