Police in Shanghai and Xiamen have broken up a major operation making and selling fake Australian wine.

More than 12,000 bottles of counterfeit Penfolds wine — worth about 10 million yuan ($1.5 million) — was seized after raids on warehouses in the two cities, it was announced on Wednesday.

Thirteen suspects are alleged to have made 3.6 million yuan in three months by selling the wine on Taobao, the online marketplace. Another two have been detained for supplying the fake goods.

Police in Shanghai's Hongkou district said they received a tipoff in August from Alibaba's anti-counterfeit unit, which said it had purchased fake Penfolds wine from an online shop and found it inferior in quality in terms of ingredients and packaging.

"The Australian winemaker reported that they found a suspicious retailer on our platform that was charging extraordinarily low price for their products," said An Ti, an employee with Taobao's governance department. She said data analysis showed the shop was in Shanghai.

Xie Yijun, head of food and drug crime for Hongkou police, said the online store was selling Penfolds for about 200 yuan a bottle, while the real thing usually costs 600 to 3,000 yuan.

After investigation, officers found the business was being run from a warehouse in Songjiang district. Xie said when they raided the property on Sept 1, they detained six suspects and seized more than 2,000 bottles of fake wine.

One of the ringleaders, surnamed Dai, confessed he had bought the wine from a dealer in Xiamen identified as Su.

Working with local police, officers from Hongkou raided a warehouse in a Xiamen suburb and seized another 10,000 bottles of fake Penfolds, along with more than 10,000 fake labels and other packaging.

"They had purchased cheap wines through various channels and were repackaging the bottles with fake Penfolds labels," Xie said.

Testing had shown the counterfeits, which were mainly sold to small bars, nightclubs and karaoke venues, did not pose a health hazard, he added.

Dai, currently in a detention house, said on Wednesday he also sold fake wines through his WeChat Moments feed.