Police in a China have seized over US$4.7 million of counterfeit goods including large quantities of leading brand Australian supplements, according to Australian and local Chinese media reports.
The seizures come as the authorities in China launch a major crackdown on counterfeit health and food products.
Guangdong police say that four criminal gangs were “destroyed” by two separate investigations conducted over a two month period. Dozens of suspects have been charged and further investigations are underway.
Police say that the counterfeit supplements were being sold through e-commerce sites and social media platforms. The fake supplements were typically described as being ‘direct overseas sales’, and while they were being sold at prices around half that of the local retail price for genuine products, criminals were making profits of nearly 1,000% in some cases.
Local Chinese media reports offer guidance on how to distinguish genuine imported health products from fakes, for example by identifying barcode numbers and Australian FDA codes. The Chinese authorities have warned that not only will products be ineffective, but that they also may present serious health risks.
Demand in China for genuine Australian food and health products remains high, thanks in in part to a phenomenon known as ‘daigou’ – a channel of commerce in which individuals act as ‘personal shoppers’ for consumers in China. While the trade originally involved Chinese citizens purchasing products to sell on to friends and relatives, daigou is an increasingly organised business with high mark-ups.
The daigou trade has been especially important to Australia’s supplements and health food sector, which command high levels of confidence in China.The extent of this was seen when the share price of leading Australian supplement brands fell last on news that the Chinese Government was planning to tighten regulations on the daigou trade. Australian media reports suggested that over a quarter of the revenue of some leading Australian supplemented brands were coming through the daigou trade.