Authorities are cracking down on the manufacture and sale of counterfeit tegong liquor, a type of high-priced alcohol traditionally supplied exclusively to government organizations and other privileged groups.

The liquor, identified by a special logo affixed to the bottle, is sold at discounted prices on Taobao, the country's biggest e-commerce site, as well as regular liquor stores.

However, the steep discounts have only been made possible through counterfeiting and other illicit practices, even extending to Moutai and Wuliangye, two of China's most well-known, and most expensive, liquor brands.

A Xinhua investigation indicated that a profiteering industrial chain is behind the phenomenon.

Xinhua reporters visited the office of a liquor distillery in the town of Maotai in Southwest China's Guizhou province, also known as the original home of Moutai, the country's national liquor brand.

The office housed a large variety of liquors, with many featuring tegong logos.

"We can supply any liquor packages per your demands," said an office employee surnamed Yi. "We have more than 1,000 types of bottles and labels and you can choose whatever you like," he added.

Yi ushered the reporters into a room where about 100 liquor bottles with various tegong logos were on display.

Yi said one of the distillery's 50 yuan ($8) bottles would normally be priced around 200 yuan.

"You cannot buy such custom-made liquor products anywhere else on the market," he said.

The flood of fake tegong commodities on the market indicates poor consumption habits, as many Chinese mistakenly believe that the alcohol is of higher quality due to its labeling, said Sun Yuanming, a researcher at the Chongqing Municipal Academy of Social Sciences.

"The manufacturers take advantage of consumers' vanity, raking in huge profits with their misleading ways," Sun said.

Du Guangyi, deputy general manager of Kweichow Moutai Co Ltd, said the company only provides a limited quantity of tegong liquor to a few central government organizations for special occasions.

"But these liquors are not supposed to circulate in the market. Almost all tegong Moutai liquor sold on the market is counterfeited," Du said.

China bans the use of names of military or government institutions for the commercial promotion of commodities, as is the case with the counterfeit liquor.

However, there are no specific laws in place to punish manufacturers, said Peng Yong, an official from the Guizhou Provincial Department of Industry and Commerce, adding that the government needs to strengthen crackdowns on illegal production of tegong products.

The State Administration for Industry and Commerce recently joined with several ministries and organizations to work out a plan to eliminate fake tegong commodities.

The SAIC said the overhaul will mainly focus on e-commerce websites that sell the products.

(China Daily 10/26/2012 page3)