Chinese 'icewine' infuriates Canadians

[admango]

Original Source (The Record)

Chinese 'icewine' infuriates Canadians
August 18, 2007
BILL SCHILLER
Toronto Star

BEIJING

When a friend complimented Niagara winemaker Allan Schmidt for successfully cracking the icewine market in mainland China, Schmidt dismissed it: He wasn't selling his wine in China, he said.

But the friend persisted. He said he was sure he'd seen Schmidt's Vineland Estates icewine for sale there.

"Again, I told him: 'No, you must be mistaken,' " Schmidt recalls.

Then the friend gave him a link to a website.

Schmidt was stunned.

There, a Chinese company was selling a product called Vineland icewine, boasting of a joint venture with a Canadian partner and, to top it all off, using a panoramic view of Schmidt's own winery on its web page.

"They'd taken it right off our website," Schmidt says in a telephone interview. "I was upset."

Four years on, and after spending $60,000 in legal fees trying to protect his trademark in China, he is still upset.

The Chinese promise him a hearing -- but not until 2011.

"The whole experience has just left a really bad taste in my mouth," the winemaker says.

China is battling a flood of fakes, from medicines and vaccines, to cellphone cards and Olympic souvenirs.

But when ambitious Chinese counterfeiters fix their sights on foreign manufacturers, no one is safe -- not Rolex, not Tag Heuer, and certainly not Canadian icewines.

"Chinese counterfeiters can be incredibly clever," says Vera Sung, a trademark lawyer with the Hong Kong law firm of Oldham Li and Nie. "And the more Canadian icewines grow in price and prestige, the more likely they are to attract counterfeiters."

The impact has hit hard: sales of Canadian icewine in China have plummeted 60 per cent from highs earlier in the decade, according to the Ontario Wine Council.

The problem, says Sung, arises from an emerging Chinese middle class that sees icewine as a status symbol, but can't distinguish real from fake.

"The problem is, they don't understand what genuine icewine is."

The same might be said of those producing the knockoffs.

This week, Han Ruabing, of Tianjin Canadian Ltd., makers of Select Late Harvest Gordo Canadian Icewine, defended the quality of her product explaining that they dilute wine concentrate, shipped "directly" from Canada, with only the best quality water.

"Only pure water," she said.

The problem is that real icewine is neither made from concentrate, nor added water -- nor, for that matter, with "late harvest" grapes.

Real icewine is produced with grapes frozen on the vine, long after the late harvest period has passed.

Nevertheless, knock-off "Canadian icewine" can be found for sale through a distributor in the heart of Beijing, complete with a tiny red maple leaf adorning its label.

But it isn't just the icewine that is being targeted. There's even a robust market for knock-off "Canadian ice wine bottles" -- without wine.

A company from China's Shandong province boasts on the Internet that it can produce 300,000 bottles per day.

And fake alcohol production in general in China is so rife that last week the Gansu Province Consumers' Association appealed to the public to smash their bottles following consumption. The aim? To choke off the cheap supply of empty bottles to the makers of counterfeit alcohol.

Counterfeiters buy them from suppliers who gather them from the garbage.

A Beijing bar manager, who asked not to be identified, told last week of shopping for the deluxe whisky, Chivas Regal.

"The vendor held up two seemingly identical bottles and said, 'This one is for 70 RMB (about $10). And this one is for 170 RMB (about $25).' They're very open about it."

Marketing fake alcohol is risky. In 2005, a Chinese entrepreneur was sentenced to death after industrial alcohol he sold as drinkable alcohol killed 14.

Cognizant of both health and commercial concerns, Beijing police last week conducted multiple raids on hotels and shops selling fake bottles of Moutai, a famous Chinese liquor.

But despite direct appeals to Chinese authorities from Ontario's Vintners' Quality Alliance (VQA) and Ottawa, the counterfeiting of Canadian icewine continues.

"It remains a serious issue," says Sherri Haigh of the Wine Council of Ontario. More than 70 of its members produce icewine, regarded as the industry's "flagship" product.

Fake Canadian icewines in China come with improbable names like Maple Dew, Silver Maple, and Toronto Icewine. Their labels are clearly marked "Product of Canada/Produit du Canada," and adorned with idyllic pictures of Niagara Falls and red, gold or silver maple leafs.

Some claim to be "Ice Wine Style," a term for which there is no known designation in the world of wine.

Others claim to be the real thing: "Canadian Icewine," using the trademarked, single-word term that only Canadian wines that meet the VQA's strict standards may use.

But as Laurie Macdonald, VQA's executive director points out, having strict guidelines with the force of law in Canada is one thing. Trying to enforce them worldwide is quite another.

She's aware of the extent of the problem: she has two dozen bottles of fake icewine in her lakeside office in downtown Toronto, almost all from China and Taiwan.

"It's a tough problem when it's outside the country," she says. "There is no magic bullet."

I occasionally post these sort of news articles because this sort of news simply does not reach China and the Chinese. We, as Chinese, need to be more aware of what is happening in the world so we can adapt and control our place in the world. Unfortunately, China's news industry is not nearly so robust as those in the West.

Most Chinese know that China produces a lot of fake goods, including alcohol. Most Chinese, however, don't truly understand just how many enemies they are making because of their disregard to other people's intellectual property. This makes the world a more dangerous and difficult place for China to succeed in.

People have long regarded America as the land of opportunity. Why does China allow itself to become known as the land of counterfeiting and theft?

What do you think? (Chinese and English welcome)

[admango]

Veronica, you're right. I have posed too many questions. Of course, I do so in the interests of making this an open-ended discussion because, well, open-ended discussions are quite interesting and potentially constructive.

As for labeling, I don't deny that I enjoy throwing in some bait to get people to start talking. That said, I'd like for you to argue that my labels are mostly false. The United States was/is a place that much of the world's poor and disenfranchised sought for political freedom and economic opportunity. These people sacrificed much to get there simply to have a chance at that fuzzy concept of "the American dream." Does China enjoy the same reputation and perception? I'd argue that it doesn't. Short of some North Koreans and a few surrounding ex-communist states that are in worse poverty and economic viability than China, do we see any sociological phenomenon indiciating that China is a place that people dream of going to? No, not really.

China is the "land of opportunity" to the wealthy, to businesses looking to source cheap labor or tap into the world's largest single market. This is a fundamentally different phenomenon and a different context is attached to the phrase.

Last I heard, Haier's only real remarkable success abroad is that its small refrigerators are doing well with college students living in dorms or small apartments.

I don't follow the laptop PC industry very closely but I can't say I've run across any news about Lenovo being incredibly successful. From a background perspective, IBM laptops were once regarded as expensive for their specs but considered reliable by corporate users (in contrast to a company like Dell that was considered great value for the money spec-wise). The fact that Lenovo is a Chinese company instantly caused people to question whether or not reliability would be affected.

SAIC has joint-ventures but those are for the domestic Chinese market. I do recall VW stating that they may have the Chinese independently design and produce a new VW vehicle model for the North American market but we don't know if that has happened yet. Even so, that news combined with much of the recent widely publicized poor crash test ratings (i.e. Brilliance BS6) has resulted in most people joking about how dangerous that car will be.

Anyway, there are a lot of things that could be discussed in this article. That's why I posted it. The section you quoted was very interesting too. Who thinks its because the Chinese simply can't get around to giving him a hearing until 2011? Who thinks its because the Chinese just don't care?

[candylan]

On the way towards a healthy modern market economy, China would inevitably confront various problems, such as China’s incomplete safety standards or these Chinese counterfeits. These problems would more or less hamper Chinese companies to expand their business in other countries.

Since this issue mainly focuses on Chinese counterfeits, let me say something about this part. From luxury goods to common clothes, anything that has a brand is being counterfeited in China. I think several factors contributing this phenomenon. Firstly, Chinese exactly know how to make counterfeits. For years, American and other western firms have set up shop in china to tap into the enormous cheap labor force. As a result, Chinese get access to those skills. Secondly, there is no severe penalty that those counterfeiters need to pay, if their fake products do not result in deaths or injuries. According to Gao Feng, the head of China’s anti-counterfeiting police unit, who was interviewed by 60 Minutes CBS,” under Chinese law, someone can not be prosecuted only because he sells a small quantity of fake products.” Raids on fake products are of no use. Those shops simply change their names or shift the location, but be back to their businesses. Thirdly, the potential market for counterfeits is large. Within China, people are addicted to brands even if they can not judge the authentic products. Outside China, those counterfeits attract customers by cheaper price and sophisticated skills. Sometimes, the counterfeit industry even prospered a whole town.

Then regarding your question why china allows itself to become known as the land of counterfeiting and theft? In my opinion, among all those things, profit is priority. To some extent, counterfeiting is the most profitable criminal venture on Earth. It is quite natural. Once I interviewed a famous scholar in sociology, he mentioned that this generation witnessed a tremendous change in china since 1978. From previous tight control under government to a lot of freedom now, people were stunned by the impact of great change. Thus, strange phenomenon which were hard to imagine before reform, come out, such as the pursuit for being famous/wealthy overnight, counterfeiting or frenzied mood. All of these can be ascribed to the loss of faith. Struggling in the throes of faith loss, people only seize the opportunity to make money.

And contrary to the news showed above, Chinese government claimed that china had formed a sound legal system to protect intellectual property rights. According to the statistics on xinhua.net, a trademark law and a patent law have been promulgated and put in force. On June 1, 1991, a copyright law went into effect. At the end of 1990s, more than 270,000 valid trademarks have been registered; and 66 countries and regions have applied for patent rights in China. American enterprises alone have applied for registration of 12,528 patent rights in China. These statistics may be outdated, but clearly present that china doesn’t run short of laws protecting intellectual property rights. However, why it would take so long to get a hearing? I should consult my friend who specified in intellectual property rights. Later I would make complements.

[admango]

Yes, China has laws. It just doesn't have enforcement. For a lot of people, it isn't just a lack of enforcement cability, it is a lack of enforcement desire.

[candylan]

Regarding to the enforcement of China’s trademark law, I firstly asked a question, did the Canadian ice-wine maker registered its trademark in China?

Although the China’s patent law system is difficult and spotty and copyright protection in China is terrible, indeed, the protection of trademarks is actually good in china. If the foreign company registered its trademark in China and learns its trademark infringed, this foreign trademark owner can file a lawsuit against the infringer, seeking damages and an injunction stopping the infringer from continuing to sell the infringing goods. For serious cases of infringement, a complaint to the office of the public prosecutor can often result in a criminal prosecution against the infringer. The courts are authorized to impose both fines and imprisonment.

Once again, I am not meant to deny the problems existing in China. Some medias who reported about China’s failure to protect foreign company intellectual property, may fail to state whether the foreign company actually registered its IP in china at all, and fail to distinguish between the various types of IP eligible for protection. It is true that a number of people make a living by usurping foreign trademarks. Easy as the illegal usurpation is, it is also easy to protect trademarks, simply registering trademark in china.

As I previously stated, many problems are inevitable and China has taken effort to solve them. The efficacy may not be instant, but be continuously steady. In a word, just be optimistic.

[admango]

I'm not an expert on trademark law but I don't think whether or not the Canadian icewine maker registered his trademark in China is the important issue here, especially considering that the copycat clearly lies and steals. Even if there isn't a registered trademark in China, there are still laws (and more importantly, morals) against lying and stealing.

Your entire second paragraph is currently considered "nonsense" because there is too little enforcement of these trademarks and copyrights. Sure, the law says the owner can file a lawsuit against the infringer, see damages and injunctions...but how often does this actually happen in China? Remember the article said that the man has to wait until 2011 just for a hearing! How do you expect people to spend money registering their trademarks or copyrights when there is no "rule of law" in China, when there is no enforcement of the law in China? Many trademarks and copyrights that are registered in China are currently held by large corporations who have the money, resources, and influence to get the government to work on their behalf. They register because it doesn't cost that much to them and it is a prerequisite for any legal action (even if that legal action is slow...but these companies are large enough to deal with slow action). Smaller companies do not enjoy the same benefits or means as larger companies, which makes smaller companies even more reliant upon a strong legal system and reliable enforcement system.

Both are still far too absent in China.

The reason why you are wrong is because, in China, registration does not guarantee protection. It afford some, sure, but it hasn't reached the point where you can make the statement you are making without many people laughing in your face.

[candylan]

thanks for your comments.

I admit that counterfeit is an illegal action, but if the foreign companies want to protect their legal rights, they should conduct the issue under the current Chinese law system. Since the counterfeit phenomenon can not be eliminated within a short time, what those foreign companies can do to better protect themselves is to register their trademark. In fact, as far as I know, registering a trademark is simple and cheap. Hand out an application, wait for 3 months’ publication and if no one objected, this trademark is registered. You are right, registration does not guarantee protection. However, it is better to register than not, right? And the courts in the more commercialized cities are actually quite good in enforcing trademark rights. China has made progress in improving trademark law for it is also important for domestic companies.

I don’t argue for Chinese law system. I just hold that while criticizing its flaws, we can not neglect its progress in recent years.

[karen]

"Fake Canadian icewines in China come with improbable names like Maple Dew, Silver Maple, and Toronto Icewine. Their labels are clearly marked "Product of Canada/Produit du Canada," and adorned with idyllic pictures of Niagara Falls and red, gold or silver maple leafs.
Some claim to be "Ice Wine Style," a term for which there is no known designation in the world of wine."


I just went through this!
It was from a friend coming back from Canada. It even has no label and vineyard name on the bottle! I see through this when I first saw it, but my friend doesn't know much about icewine.

[Annie]

That frustration and impotence in the face of so many criminals loose, I urge you to continue the struggle not give up this fight for your rights, luck!

Affiliate promotion

[Leslie]

Don't waste another minute - by searching the internet
Online Business ,
There is nothing to lose, and everything to gain by getting on board now.

More info at: http://www.aprendeatrabajareninternet.blogspot.com