According to China’s General Administration of Customs, the seized goods consisted of more than 1,000 bottles of Penfolds from Australia and over 100 bottles of top-end Bordeaux wine, including first growth labels such as Château Lafite Rothschild and Château Margaux.
The Chinese customs authorities discovered the cases of illegally imported bottles by checking the amount of wine declared on the offending company’s documents against the actual number of items being transported. The smuggled goods were being concealed amongst a larger amount of boxes of Chilean wine.
While Chinese authorities have not disclosed which cuvées of Penfolds were being illegally transported, media reports suggest that these could be Penfolds bin 389 and Penfolds bin 407.
The news follows a further smuggling attempt in July 2021, when Shenzhen Liantang Customs stopped a range of goods – including wine as well as seafood and hair products – from entering mainland China from Hong Kong. The attempt involved high-end Bordeaux labels such as Château Lafite Rothschild and Château Mouton Rothschild, Australian wine (Penfolds bin 707), Champagnes, and whisky, for a total of 4,174 bottles and a value of RMB 18m (£2.8m).
While Hong Kong enjoys tax free wine imports, exports to China are subject to a minimum of 43.2% duty, with Australian wines penalised by even higher taxes of up to 218% following an escalating trade war last year. As reported by Decanter last March, for instance, leading Australian exporter and Penfolds owner Treasury Wine Estates faces a duty rate of 175.6% on all its wines imported into China in containers of two litres or less.
Hong Kong’s tax free status might represent an incentive for wine smugglers. The imposition of high import duties caused shipments to mainland China to plummet, while exports of Australian wine to Hong Kong experienced remarkable growth over the past year, up by 45% according to the latest Wine Australia’s Wine Export Monitor.