Robert Joseph to winery owners: Beware of Chinese wanting gifts


By Jim Boyce

grape-wall-of-china-robert-joseph-on-deals-in-china
Art work - or a sign you are getting screwed?

Robert Joseph writes on his blog that New Zealand winery owner Graeme Avery was scammed by an outfit in China that feigned interest in his products in order to get him to purchase an expensive artwork. The gift was to be given when the head of the Chinese company visited the winery to seal the deal, a visit that never happened. The details:

“Put yourselves in the shoes of a producer with plenty of wine to sell. You receive an email or letter from a Chinese “Buying Center” interested in placing a test order worth $250,000 or more for one of its clients. There is no haggling over price, and an undertaking to wire payment for the wine before it leaves your winery. To make the deal, you are invited (at your own cost) to visit Guilin where the buyers are based. Once there, you are welcomed and entertained lavishly and taken on city tours. Next, comes a visit to an art gallery, where it is explained that you should honour local tradition by buying a gift for the head of the company that is actually purchasing your wine. You will carry the artwork home with you to hand over to the buyer when he visits your winery and signs the final contract. The art on show is fairly pricey, and you are warned off spending too much. Nothing more than $25-30,000. You make the purchase and head home with it, full of happy memories and pleasure at the thought of the Chinese money that is about to flow in your direction. But that, unfortunately is the end of the story. The buyer never actually appears at your door and efforts to contact him or the Buying Center are fruitless. You are left with your wine, an almost certainly heavily overpriced painting and credit card bills for an expensive trip to China.”

The vast potential of the China market is known to lead foreign businesspeople to take risks they might not make in other circumstances. But common sense is as applicable in this country as any other. Such as: If it sounds too good to be true, it is (“I can get you 1982 Chateau Lafite for USD50 per bottle, but don’t tell anyone else!”). Or: If your contact uses a hotmail, gmail, or other such account, then e-mailer beware (“I represent a major  Chinese buyer that wants two million dollars of your wine – contact me at takethebait@hotmail.com”). Or: If there are no or minimal negotiations, be suspicious (“We love your wine so much, we’ll pay whatever you tell us – as long as you buy this painting, that is”).

I asked Dan Harris, long-time observer of China’s legal and business scenes as well as co-author of China Law Blog about the case. He said, “The key is due diligence and to not buy big gifts.” Newcomers to the China market would do well to check his comprehensive site.

Related posts:
Wine word:
Robert Joseph on China wine tourism, blind tastings, and more

See more posts by Jim Boyce.

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5 Comments

  1. A Chinese colleague of mine (who’s boyfriend worked for a French wine distribution company), in relation to wine values in BJ, once enthusiastically boasted that she could assertain first growth Bordeaux form a restauranteur in BJ for 200-500 RMB. I looked at her, trying to keep a straight face, but waiting patiently for the punch line!

    And she is Chinese, and been here for many more years than me. She should know better, but sometimes you put the blinkers on when you desperately want to believe. No offence intended to those who (with little experience of this market) got scammed in your article.

  2. I was contacted by similar scam artist who wanted to buy 100 000 bottles and I have to sign up contract Where? in China (red flag) anyway I send him few samples bottles that (lucky/unlucky) was delivered broken. Than one more due diligence step helped me: Typing his company name scam at Google. And I got result on this clown who wanted to but $500 000 worth of ship skin here, $800 000 worth of flooring there. SO I contacted authorities in ShenZhen.

  3. I am a wine consultant based in New Zealand and can vouch for the Guilin scam.

    We must have been lucky though, our painting only cost USD6000 !

  4. that has to be the most perfectly appropriate image (bottle opener) possible for this post. brilliance.

    as for the scam… I am amazed at the intricacy of the scheme.