Police in Quanzhou city, in the southern province of Fujian, broke up three gangs running workshops that made fake bottles of several famous brands of baijiu, a fiery Chinese spirit, it said.
The suspects would buy cheap liquor for about 10 yuan a bottle and pour it into the counterfeit bottles, which ended up being sold in cities across the country for up to 400 yuan ($62) each.
The haul could have earned the con-men 100 million yuan ($15.58 million), Xinhua said.
At least two of the workshops had been operating since 2015.
China has increased its efforts to improve food safety after a series of scandals stoked public concern. However, liquor stores, restaurants and supermarkets still wage a constant battle against fake alcohol.
($1 = 6.4180 Chinese yuan renminbi)
by Brenda Goh