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Two New Zealand souvenir firms and two of their senior managers have been heavily fined for ripping off Asian tourists with expensive mementos that were not what they were claimed to be, the country's Commerce Commission announced Tuesday.
The prosecutions followed an investigation that began when police, Customs and other law enforcement agencies raided 10 premises in the geothermal resort town of Rotorua and one in Auckland in August 2011 and more would follow, according to the commission.
Organized groups of tourists from the Chinese mainland, the Republic of Korea and Taiwan were taken to some of the premises and sold items such as alpaca rugs and merino or alpaca duvets, said a statement from the commission.
The tourists paid dearly as a result of false claims that the alpaca rugs were New Zealand made, when they were imported, and that the wool content of the duvets was 100-percent alpaca or merino when it was not.
In total, the two companies and individuals were fined 259,000 NZ dollars (217,045 U.S. dollars). Top Sky Holdings Ltd. was fined 140,000 NZ dollars, while its managing consultant Haidong Chen was fined 24,500 NZ dollars.
The company's Rotorua shop offered alpaca rugs imported from Peru that had been re-labeled as "Alpaca New Zealand, 100 percent Baby Alpaca, proudly made in New Zealand by Alpaca New Zealand."
The rugs were priced between 4,000 NZ dollars and 8,000 NZ dollars each when Peruvian alpaca rugs are sold elsewhere for between 1,000 NZ dollars and 1,600 NZ dollars each.
Kiwi Wool Ltd. was fined 84,000 NZ dollars, while its managing director Jinming Chen and was fined 10,500 NZ dollars.
Kiwi Wool made and sold wool duvets with labels stated they were "100 percent pure alpaca wool" when the alpaca wool content was just 20 percent, or that they were "100 percent New Zealand merino lamb wool," when the wool content was not merino.
The duvets cost about 70 NZ dollars to make and they were sold to tourists for between 400 NZ dollars and 1,000 NZ dollars.
"New Zealand has a reputation for producing premium wool products. Tourists are prepared to pay significantly more for these products than for the same items produced elsewhere," Commerce Commission chairman Mark Berry said in the statement.
"In this case tourists, who represent a valuable segment of the country's economy, have been deliberately targeted and harmed by this conduct."
Associate Tourism Minister Chris Tremain said the prosecutions sent a very clear message that the New Zealand government would not tolerate the exploitation of international visitors.
"We strive to ensure that our visitors are offered the best possible experience of New Zealand, including their interactions with our retail sector," Tremain said in a statement.
"Breaches against tourists are relatively rare when considered across the wider tourism industry, but they will not be tolerated. " Another six companies and five individuals are also facing charges as a result of the investigation.