Asian tourists scammed with fake 'Made in New Zealand' alpaca duvets

A company that targeted Asian tourists with fake alpaca duvets -- falsely labeled as "Made in New Zealand" -- has been fined a total of 109,000 NZ dollars (73,935 U.S. dollars), New Zealand's trade watchdog said Monday.

Duvet and rug business Nangong Ltd. and its owner, Yun Qiang Hou, were convicted and fined in Auckland District Court after pleading guilty to 14 charges of making false claims that their duvets contained alpaca wool and were made in New Zealand.

The Auckland-based business imported and supplied "alpaca" duvets to three main Auckland retailers that catered primarily to the Asian tourist market, said a statement from the Commerce Commission.

Nangong and Hou admitted to falsely claiming that its duvets contained alpaca wool when they were made from 100-percent sheep wool that were actually made in China, not in New Zealand as labelled.

Nangong was able to reduce costs and increase profits by using sheep wool instead of alpaca wool.

Commerce commissioner Anna Rawlings said in the statement that Nangong's unlawful actions impacted on the retailers, their customers and competing businesses.

"Retailers and consumers paid a premium because they thought the duvets were New Zealand made, and contained genuine alpaca fibre. These two factors meant consumers were paying up to 700 NZ dollars (475 U.S. dollars) for a duvet that was worth around 240 NZ dollars (163 U.S. dollars)," said Rawlings.

"This type of offending also harms competitors in the same market who are selling genuine alpaca wool products which are New Zealand made."

The commission has previously prosecuted eight companies and seven individuals for selling imported alpaca rugs as "Made in New Zealand," and claiming duvets were predominantly alpaca or merino wool when they were not.

They were convicted and fined more than 1 million NZ dollars (678,000 U.S. dollars) totally.