Wholesalers and hawkers of fake designer clothes face immediate jail terms after the Court of Appeal warned yesterday that Hong Kong was becoming a haven for counterfeit goods. For the first time, the court imposed a jail term on a wholesaler of fake designer labels, and added that the SAR's international reputation was being seriously damaged by the alarming number of fake goods. 'During the past many years, offences involving counterfeit goods are becoming more prevalent. Some say it has reached an alarming level,' the judges said. 'This has damaged the reputation of Hong Kong. If these offences are permitted to become prevalent or widespread, Hong Kong will be regarded as a haven for counterfeit goods. 'Deterrent sentences must be imposed.' The ruling was handed down by Chief Judge Patrick Chan Siu-oi and Justices Michael Stuart-Moore and Arthur Leong Shiu-chung. It follows a government appeal against the District Court sentencing of a hawker-turned-wholesaler who was given four months' jail - suspended for two years - and fined $150,000. The Court of Appeal agreed the sentence imposed on Lam Chi-wah was 'wrong in principle and manifestly inadequate', and increased it to six months' jail for Lam's first charge and one month for the second, to run concurrently. Customs officers caught Lam with $500,000 worth of clothing, bearing fake labels for D&G, Polo, Ralph Lauren and Dunhill, in a Tai Kok Tsui premises on May 11 last year. He pleaded guilty before District Court Judge Peter Line to two charges under the Trade Descriptions Ordinance of possessing for sale goods with forged trademarks. The trial judge said he considered the goods were so obviously fake that 'no one - Dunhill, D&G, Polo or Ralph Lauren - ever lost a sale due to this sort of activity'. 'I have seen a few in court. No one would be fooled,' Judge Line said. 'No one was thinking they were getting the real thing, and in fact all over Asia you can go and buy a Dunhill or a Polo T-shirt off a stall and everyone knows what they are getting.' The judge's view was totally wrong, the Court of Appeal said. 'The truth of the matter also is that these types of well-known trade names do suffer, both directly and indirectly,' the appeal judges ruled.