The Hongcouver
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Top Canadian winemaker John Chang of Lulu Island Winery is arrested for smuggling in China, state media suggests

Winery says Chang is helping Chinese authorities with their investigation, and is confident there was no wrongdoing

PUBLISHED : Friday, 22 July, 2016, 4:17am
UPDATED : Friday, 22 July, 2016, 9:21pm

John Chang, one of British Columbia’s immigrant success stories thanks to his Lulu Island Winery in Richmond, is believed to have been arrested in China on suspicion of smuggling tens of millions of dollars’ worth of ice wine, state media reports suggest.

A report in the state-owned Legal Daily , which covers judicial matters and operates under China’s Ministry of Justice, said on Wednesday that a Canadian winery owner named “Zhang” had been arrested for smuggling wine worth 300 million yuan (US$45 million) into China, including 200 million yuan worth of ice wine.

China’s Criminal Law specifies imprisonment of 10 years to life for smugglers who evade more than 500,000 yuan in taxes.

Neither the winery nor its owner are fully identified by name in the report, which cited an announcement by Shanghai Customs officials in the wake of a series of raids.

However, photographs of the raids show officers inspecting crates of wine carrying the Lulu Island Winery name and logo.

“Zhang” is a typical spelling variant of “Chang”.

WATCH: John Chang explains ice wine in Putonghua

In a press release, the winery said that it and Taiwanese-born Chang “have been cooperating fully with Customs authorities with their investigation, and we are confident that the investigation will confirm that Lulu Island has not done anything wrong”.

For our customers and the public who have expressed care and support for Lulu Island and John, please accept our most sincere appreciation
Lulu Island Winery

“Lulu Island believes all of its wine imports [sic] to China have been done in full compliance with all application laws, rules and regulations. We understand Customs authorities in China has recently conducted investigations regarding the foreign imported wine from a number of countries including Canada. Lulu Island has engaged legal advisors in China to assist with responding to the inquiries.”

The statement did not directly address whether Chang had been arrested. “For our customers and the public who have expressed care and support for Lulu Island and John, please accept our most sincere appreciation,” it added.

The Legal Daily report and photos, which were subsequently carried by other state and private media, said “Zhang” was among four people charged, and he had already appeared in court and confessed.

The announcement said anti-smuggling raids had been carried out in March in Shanghai, Xian, Chengdu, Shenzhen, and Xiamen, resulting in 18 arrests and the filing of four criminal cases.

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It said Zhang, described as the winery’s “chairman”, would encourage mainland Chinese tour groups to visit his Canadian winery, then offer to ship their purchases back to China. But customs declarations produced by the winery would greatly understate the true cost of the wine to minimise import duties.

Three other companies that directly purchased the wine are also under investigation, the Legal Daily report said.

Legal Daily said that “a certain brand of ice wine from Canada” had been routinely declared to have cost about 10 yuan. But 375ml bottles of ice wine typically sell for about C$50 (US$38) or more.

Chang, 61, once a successful electronics businessman in his native Taiwan, has developed Lulu Island Winery into an export powerhouse, winning a slew of awards along the way. He was invited to join then Canadian prime minister Stephen Harper on a trade mission to China in 2012.

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Chang’s vineyards in the Okanagan Valley reportedly account for 50 per cent of BC’s entire ice wine production. The sweet, syrupy wine, which can only be produced after grapes freeze on the vines and is therefore limited in production volume by seasonal vagaries, has exploded in popularity among Chinese drinkers. Along with maple syrup and smoked salmon, ice wine has become the favoured Canadian souvenir gift among Chinese and other Asian visitors.

In a profile for Canadian Immigrant magazine after he was named a “Top 25 Canadian Immigrant” last year, Chang was described as accounting for 20 per cent of all Canadian wine exports to China. His winery in Richmond, BC, which relies on grapes from Chang’s Okanagan vineyards and local Fraser Valley berries, hosts 3,000 buses carrying Chinese tourists every year, the Vancouver Sun has reported.

Chang, president of Lulu Island Winery, is meanwhile scheduled to open his new C$30 million Grizzli Winery in the Okanagan Valley this summer.

Lulu Island Winery’s profile of its founder says Chang immigrated to Canada in 1995, and began making wine the next year, founding Blossom Winery in Richmond in 2000. It was renamed Lulu Island Winery in 2007.

“I hope the high quality of grape in British Columbia can be known around the world and make a good example for immigrant entrepreneurs,” says Chang in the profile.

NOTE: This story was updated to incorporate a press release from Lulu Island Winery, issued several hours after the SCMP’s initial online publication.

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The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email [email protected] or on Twitter, @ianjamesyoung70.