A New Zealand winemaker who sold bulk red wine to supermarkets and liquor stores while dodging taxes has been convicted and fined.

New Plymouth's Sentry Hill Winery Ltd was placed into liquidation in 2016 after Customs found $280,000 in unpaid excise duty.

The sole director and shareholder Stephen Parkes' powers as a director ceased upon liquidation.

His wife, Wendy Parkes, then incorporated Sur Le Mur Ltd and applied for a Customs-controlled area licence to manufacture alcoholic products at the Sentry Hill Winery. Customs declined her application on the basis that the area was already licensed to Sentry Hill Winery, which was in liquidation.

A Customs officer later found that Sur Le Mur Ltd had sold bulk red wine to retail outlets in New Plymouth despite not having a licence to manufacture or sell the goods.

Customs conducted a stocktake of Sentry Hill Winery in May 2016 and again in January last year. The second stocktake revealed there was bottled liquor that was unaccounted for.

They also found documents that recorded the Parkes' dealings with the unaccounted for goods, which resulted in more than $13,000 excise duty owed to Customs, which was never paid.

Parkes had sold the liquor to his wife's company Sur Le Mur Ltd, which then on-sold it to grocery and liquor outlets, Customs said.

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Sentry Hill Winery and Sur Le Mur wines were convicted on Friday at New Plymouth District Court and ordered to pay more than $13,500 in reparations and fined $3500 for unlawfully manufacturing and selling wine and defrauding Customs.

Customs' manager central and southern ports Joe Cannon said it was a good lesson to other New Zealand winemakers about the importance of obtaining a Customs-controlled area licence to manufacture and sell goods and paying excise duty.

"People may think that because they are a small business then they can break the rules, however, Customs takes these matters very seriously, and as seen in this case, we will prosecute when the law is broken," Cannon said.

The Herald on Sunday revealed at the weekend a rise in booze smuggling into New Zealand that the liquor industry estimates is costing the economy around $40 million annually in evaded taxes.