Fake souvenir companies fined $600k

A company which sold items made from the wool of non-existent "snow alpaca ... raised above the snow line in the South Island" is among those fined more than $600,000 for misrepresenting their goods as New Zealand-made.

In his decision, released today, Rotorua District Court judge Ian Thomas convicted and fined four companies and four individuals for selling visiting Asian tourists a range of imported alpaca goods "proudly made in New Zealand", and making claims that duvets were 100 per cent alpaca or merino wool when they were not.

The companies are Hyeon Company Limited, Duvet 2000 Limited, JM Wool Limited and Premium Alpaca New Zealand Limited.

The individuals are Han Young Chae, Jong Myung Lee, Yun Duk Jung and Bo Sun Yoo.

They are the second group of companies being sentenced for breaches of the Fair Trading Act after 10 premises in Rotorua and one in Auckland were searched in August 2011.

In March, two other companies, Top Sky and Kiwi Wool, and two individuals were convicted and fined $259,000 for similar offending.

The Commerce Commission, which laid the charges, said organised tour groups from China, Korea and Taiwan were taken to several of the premises and sold items such as alpaca rugs and alpaca and merino duvets. Due to misleading representations, the tourists paid significantly more for the items than they were actually worth.

The misrepresentations were not only made on labels and in brochures but also verbally by staff selling the goods. In one case tourists were told the alpaca items came from "snow alpaca" that were "raised above the snow line in the South Island", the commission said.

The offending companies and individuals were convicted and fined $601,900.

Commerce Commission chairman Mark Berry said the tourist market, and New Zealand's reputation for producing premium wool products, must be protected.

"When tourists come to our shores they must be able to trust that what they are being told is true. Re-labelling items as being made in New Zealand when they are not, misleads buyers and can harm the New Zealand tourism industry," Dr Berry said.