Two companies have received fines totalling almost $260,000 for selling fake souvenirs to Asian tourists that claimed to be made in New Zealand, but were produced overseas.

Top Sky Holdings Limited, charged with 12 breaches of the Fair Trading Act, was fined $140,000 for selling alpaca rugs imported from Peru and relabelled ‘Alpaca NZ, 100% Baby Alpaca, proudly made in New Zealand by Alpaca NZ' in Auckland District Court.

Alpaca rugs were sold to Asian tourists claiming to be NZ Made.

The rugs were sold to tourists from Korea, China and Taiwan on organised tours visiting the Rotorua based outlet.

The alpaca rugs sold by Top Sky were priced between $4000 and $8000 each, when Peruvian alpaca rugs are sold elsewhere for between $1000 and $1600 each.

The company's managing consultant Haidong Chen was also charged with 28 breaches of the Fair Trading Act and was fined $24,500 for his conduct relating to both Kiwi Wool and Top Sky.

Kiwi Wool Limited was charged with 18 breaches of the Fair Trading Act and fined $84,000.

The company manufactures and sells wool duvets both to retail outlets and directly to tour groups. The labels on the duvets stated they were '100% pure alpaca wool' when the alpaca wool content was just 20 per cent.

Kiwi Wool also manufactured and sold duvets with labels stating they were '100% New Zealand merino lamb wool‘, when the wool content was not merino.

The duvets were sold to tourists for between $400 and $1000 when the cost to manufacture them is about $70.

The directors of the company admitted to the Commerce Commission that they knew the representations made about the duvets were not true.

The company's managing director Jinming Chen faced 18 charges and was fined $10,500.

Commerce Commission Chairman Dr Mark Berry says the tourists paid more thinking they were getting a New Zealand made product.

'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.

'To sell items as New Zealand made when they are not, or knowingly label and sell items as 100% alpaca or merino wool when they are not, is deliberately misleading buyers.”

In sentencing delivered on March 28, Judge Dawson said the defendants demonstrated a 'large degree of wilfulness and carelessness in the misrepresentations [they were] deliberate and systematic.”

Judge Dawson also said the defendants' conduct 'undermined fair competition in the market and unfairly disadvantaged other traders."

The charges brought by the Commerce Commission under the Fair Trading Act followed search warrants executed on ten premises in Rotorua and one in Auckland in August 2011.

The search warrants were a multi-agency initiative by the Commerce Commission, Police, Customs, Immigration and the Wildlife Enforcement Group. Tourism New Zealand assisted the investigation.

There are six further companies and five individuals facing charges as a result of the investigation who are still yet to be dealt with by the courts.