A taxi driver has been charged by police after allegedly using his day job as a cover for a 'sly-grogging' operation in the Kimberley town of Kununurra.

Police received reports of a taxi driver delivering bottles of wine to people in a park on Tuesday.

Senior Sergeant Steve Principe said later that day, a taxi driver was spotted leaving a house with a suspicious bag.

"One of my officers noticed a taxi driver leave an address carrying a chiller bag that may have had contents that would be of interest to us," he said.

"Officers searched the taxi and allegedly located six bottles of wine and documentation indicating sales were being made."

The taxi driver, 67, has been charged with the unauthorised sale of alcohol, a practice known locally as 'sly-grogging'.

Police will allege the bottles of chardonnay were being sold at five times their retail price.

"It will be alleged the alcohol was being sold from the taxi, which is extremely disappointing ... you put a bit of trust in that kind of service and expect them to operate above board," Senior Sergeant Principe said.

"It's a big concern for us because we have a lot of issues with alcohol-related crime."

Officers later executed a search warrant on the taxi driver's house, and allegedly found almost a kilogram of cannabis.

A 62-year-old man who also lived at the property, and who works for the same taxi company, has been charged with possession of cannabis with intent to sell or supply.

Both men have been summonsed to appear before the Kununurra Magistrates Court next month.