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First conviction in China over fake Scotch

The first criminal case in China against someone misusing the description 'Scotch Whisky' has been concluded.

The Chinese authorities prosecuted LI Cuihong, a wholesaler selling a range of fake alcoholic drinks, in Urumqi in the west of China. Some of the fake products were labelled as 'Scotch Whisky' when, in reality, they were un-aged Chinese spirits containing artificial flavouring. She has been sentenced to four years in prison and fined £50,000.

The Scotch Whisky Association said this criminal conviction underlines the serious approach taken by the Chinese authorities to the issue of fake alcohol, which can be dangerous for consumers and can harm the reputation of Scotch Whisky. It is the first time the 'Scotch Whisky’ trademark in China has been used to take a criminal case in that market. While there have been previous convictions for misuse of individual company trademarks, it is the first prosecution for using the term 'Scotch Whisky'.

Lawyers told the judge that if the fake spirits were sold they would "cause enormous damage to the trademark owners and consumers". They also drew the judge's attention to the fact the defendant had served a prison sentence as a result of a previous conviction for selling illegal spirits.

The defendant's lawyer did not challenge most of the facts presented, but argued that 1,400 bottles should be disregarded when passing sentence.  Although these bottles bore the words 'Scotch Whisky', the defendant's lawyer claimed they did not resemble any international Scotch whisky brands. The judge rejected this argument and made it clear that misuse of the words 'Scotch Whisky' alone constituted a serious criminal offence.
The SWA described this decision as a major success for its legal protection work in China.

Lindesay Low, the SWA legal adviser responsible for China, said: "China is a growing market for Scotch whisky. Unfortunately, its popularity also makes the production and sale of fake Scotch whisky a lucrative pursuit. The Chinese authorities are very supportive in the fight against fakes and this case shows they are willing to crack down on those involved. It is the first time the Scotch Whisky collective trademark has been used to secure a criminal conviction.

"This conviction of someone selling fake 'Scotch Whisky' should be an example to others involved in this dangerous business which is damaging for both consumers and the legitimate drinks industry. It is further evidence of the successful work being done in co-operation with the Chinese authorities to protect the reputation of Scotch Whisky."

China is a top 20 market for Scotch Whisky. Direct exports were worth £66 million in 2011, but the total value of the market (indirect and direct exports) was around £100m.

25 January 2013 - Felicity Murray