Auckland firm fined for tourist rip-off

An Auckland souvenir company that sold product at some Rotorua stores has been fined $22,000 in the Auckland District Court for misleading Asian tour groups about the country of origin of expensive alpaca rugs.

BGV International Ltd were fined after misleading tourists from China, Korea and Taiwan, who were part of organised tour groups ferried to BGV's premises, and told that the rugs were "New Zealand made".

The rugs in fact came from Peru with the tourists paying as much as $4000 per rug - up to four times more than they would have paid elsewhere for properly labelled rugs.

Commerce Commission chairman Mark Berry said New Zealand's reputation was damaged when tourists were treated in this way.

"This was nothing short of a rip-off. In this case, tourists, who represent a valuable segment of the country's economy, have been harmed and New Zealand's reputation as a tourist destination suffers as a result.

"The behaviour also harms other law-abiding tourism businesses because tourists may not know who they can trust."

This prosecution followed an extensive investigation by the Commerce Commission that involved police, Customs, Immigration Service and the Wildlife Enforcement Group.

In total, eight companies and seven individuals were prosecuted. Fines imposed in these cases exceed $880,000, with one company and one individual still to be sentenced.

"The most concerning aspect of these cases for us is the way in which a number of companies have systematically fleeced visitors to New Zealand.

"This gives us real cause for concern about parts of New Zealand's organised Asian tour group industry. We will continue to take the steps necessary to put things right," Dr Berry said.

BGV International was convicted for 10 breaches of the Fair Trading Act.

BGV also exported a significant quantity of the falsely labelled alpaca rugs to its parent company in Australia.