Authorities are cracking down on the manufacture and sale of counterfeit "tegong" liquor, a type of high-priced booze that is traditionally supplied to government organizations and other privileged groups. The liquor, designated by a special logo affixed to the bottle, is sold at discounted prices on Taobao.com, 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 central 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 work out 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 U.S. dollars) liquors 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 "tegong" commodities on the market demonstrates poor consumption habits, as many Chinese mistakenly believe that the commodities are of higher quality due to their "tegong" labeling, said Sun Yuanming, a researcher at the Chongqing Municipal Academy of Social Science.
"The manufacturers take advantage of consumers' vanity, raking in huge profits with their misleading ways," Sun said.
"Tegong" products also include cigarettes, drinks and food.
Du Guangyi, vice 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 'tegong' liquors are not supposed to circulate in the market. Almost all 'tegong' Moutai liquor sold on the market is counterfeited," Du said.
Many "tegong" products are sold without invoices through backdoor channels to avoid taxation, according to a dealer surnamed Wang.
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.
"Products with 'tegong' logos should not exist at all, as our country's advertising law bans commercial promotions that use the names of government institutions," said Liu Junhai, a business law professor at Renmin University.
Deeply rooted "power worship" among consumers should be changed in order to eliminate demand for counterfeit "tegong" products, according to Tang Kun, a researcher at the Hubei Provincial Academy of Social Sciences.
Last year, local industry and commerce administrations launched a campaign to deal with counterfeit "tegong" products.
The State Administration for Industry and Commerce (SAIC) recently joined hands 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.
Extravagant spending by Chinese officials, especially on overseas trips, vehicles and official receptions, has aroused public criticism in recent years, as many people believe government departments spend too much on such items.
Since 2011, central government departments, public institutions and some local governments have published their expenditures for public supervision.
"Relevant departments should take the initiative in minimizing the consumption of 'tegong' products. Otherwise, it will affect their public support," said Shen Yang, a professor at central China's Wuhan University.