Eight criminals face prison sentences and fines over fake Mars, Ferrero products

Eight people have been sentenced to between one and five years in prison and face a total of 6.21 million yuan ($901,704) in penalties for producing and selling fake branded chocolate.

Xinwu District People's Court in Wuxi, Jiangsu province in East China, handed down the ruling in mid-January, having heard the trademark case three times.

The court decision reflects equal protection for trademark owners, Jiang Shaowen, vice-president of the court, told Chinese media.

"Trademark protection shows respect for a company's branding efforts and helps to maintain a fair environment for market competition," Jiang said.

The investigation into the case was listed among other major legal actions overseen by the Ministry of Public Security during its Sharp Sword crackdown campaign in 2016. The program targets counterfeits in sectors such as food, medicine, construction materials and products related to agricultural production.

In this case, the discovery of the illegal action was attributed to a shop owner's business prudence.

Soon after Valentine's Day in 2015, the shop owner, surnamed Ji, who specializes in wedding candy retail trade in Changzhou, a city neighboring Wuxi, received many complaints from his customers that their Dove-branded chocolate bought from his shop tasted strange.

Ji contacted his seller Xu Liujun about his concerns. Xu promised that all the chocolate was authentic and he even gave Ji a telephone number of a so-called licensing agent, who turned out to be Xu's wife, surnamed Li.

"Don't worry, the chocolate may taste different due to the variation in production procedures and storage environments," she said to reassure Ji.

Despite the couple's promises, the shop owner, facing mounting pressure from customers canceling their orders, sent some samples of the purchases from Xu to Dove chocolate manufacturer Mars China. The test results showed they were all fake.

Thus, Mars reported the case to the police in Wuxi in March 2015.

From January to February 2016, the police discovered three illegal production and sales sites in Anhui and Jiangsu provinces. They seized more than 300,000 fake Dove and Ferrero chocolate granules, as well as stockpiles of counterfeit trademarks, which amounted to millions of yuan in potential sales.

Of the defendants, Zhang Chengbing, Wang Jiacai and Xu Shaobing were sentenced to between four and five years in prison and were fined amounts ranging from 1.63 million yuan to 1.85 million yuan.

The three are residents of Wuhu, Anhui province. They liked to gamble and had huge debts. To pay off the money, they recruited workers to counterfeit branded chocolate since September 2014.

A 9-kilogram box of counterfeited Dove chocolate cost them about 300 yuan to make and was sold to wholesalers at 440 yuan to 480 yuan, nearly half of the price of the genuine product. In the first month of production, they raked in a total profit of 690,000 yuan.

Later, due to a disagreement over the earnings distribution, Wang pulled out and founded another illegal plant with his relative Hu Kehua to fake Ferrero chocolates.

An illegal industrial chain was formed, covering raw materials supply, production, wholesale and retail, said Liu Bowen, the judge presiding over the case.

The illegal sales covered different cities and provinces, the judge added.

All these aspects were factored into the final court decision, Liu said.

Liao Zhaohui, sales manager of Mars China in East China, said: "We are pleased with the sentence."

"Our company has no tolerance for the production and sale of counterfeits, since Dove entered China approximately 20 years ago," Liao said, adding that Mars will increase cooperation with the authorities in fighting fakes, in addition to enhancing quality control within the company itself.

Lyu Mei, an official at the Jiangsu provincial prosecutor office, said: "Well-known brands are most vulnerable to attack."

Lyu's office dealt with more than 190 trademark cases in 2016, accounting for 76.8 percent of the total involving intellectual property infringements in the year.

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(China Daily 02/09/2017 page17)