Bottles of counterfeit wine being sold on China's site, Alibaba, shown at a press conference in Shanghai on November 16, 2017. Pictures supplied by Alibaba Some boxes and bottles shown at a press conference on Thursday had Rawson's Retreat and Bin 128 labelling, but many other labels were blocked out. The prices quoted by police suggest the haul may include premium wines, including top-of-the-range Grange. More than 2000 bottles of wine were found in Mr Dai's Shanghai warehouse and another 10,000 bottles and 10,000 fake labels were found a fortnight later at two warehouses in Xiamen run by his supplier, a Mr Su. Chinese reporters were given access to Mr Dai in detention, where he told them Mr Su had sourced red wine from overseas and re-bottled it in China, "so they are not fake wines, they bring no harm to the human body". "I told customers the price is very cheap but the quality is not that good. They were willing to buy."

Penfolds Grange on The Bund, Shanghai, China, in 2011 Police seized another 2000 bottles when they arrested five online retailers selling to pubs. Treasury Wine Estates is the top-ranked wine importer in China. Chief executive Michael Clark said in August the company can't keep up with consumer demand, where sales of Penfolds, Rawsons Retreat and Wolf Blass grew by 33 per cent last year. Penfolds wine being enjoyed in China Credit:Qilai Shen A Shanghai-based marketing consultant, Matthew McKenzie, who turned Weet-Bix into a hit in China, said fakes were "an absolutely critical issue" for Australian brands because they risked brand integrity.

"It is broader than just alcohol, it is anything from dishwashing liquid to infant formula. There are fake products in every channel," said Mr McKenzie, The Export Group's chief executive for Greater China. Brands that are high in value and demand, such as Penfolds, are more likely to be a target. "For brands we are looking at protecting, we suggest a unique QR code is put on the product before it comes to China, but this adds to the cost and complexity of the manufacturing process," he said. Chinese consumers can then check the QR code before they buy, to test a product's authenticity. Treasury Wine Estates began etching the glass on bottles of its most expensive wines this year, in an effort to deter fraud, which has become an increasing focus of its business as Chinese sales drive profits.

In a statement, Treasury Wine Estate said it applauded the efforts of Shanghai police and Alibaba: "This is a significant step forward in helping combat illegal operators". "Treasury Wine Estates China continues to increase our investment behind brand protection in China. Importantly, legitimate sales of TWE's quality wines remain be extremely strong – a great recent example of this is the record-breaking Singles Day online shopping event in China involving Alibaba and a number of our e-commerce partners which saw our sales growth increase significantly through our own-managed platforms". Alibaba runs both Taobao – which is China's version of Ebay, and Tmall, which is more like a department store in which companies set up their own branded "flagship stores". The authenticity of goods sold on Taobao is uncertain because they are sold by small operators. TWE launched a flagship store on Tmall two years ago to target Chinese millennials.

An Alibaba spokeswoman said Alibaba technology had helped crack the counterfeiting ring and police had called for society to "fight counterfeiting like they control drink driving".