Hundreds of counterfeit Ice-Watch timepieces were seized by HM Revenue & Customs in Wales.
The fake goods were found in a storage facility in Bridgend town centre on Tuesday.
Two men have been arrested in connection with the haul of fake goods. A 50-year-old man from Pencoed and a 57-year-old man from Birmingham were arrested and have now been bailed until March.
A spokesperson for HM Revenue & Customs said that Trading Standards has been notified about the fake Ice-Watches.
Paul Harry, marketing director at Ice-Watch UK distributor Peers Hardy, said: "The Ice-Watch phenomenon has attracted copies to every international market and the UK in particular.
"Ice-Watch sales continue to grow in the UK and the brand had a spectacular Christmas following continued marketing investment. Such growth is bound to attract the attention of unscrupulous elements so we are grateful for the efforts of HMRC to protect the brand locally. Meanwhile, the Ice-Watch owners are working extensively in the Far East to target such copies at source."
The counterfeit watches were found alongside 500,000 smuggled cigarettes. HM Revenue & Customs said that the duty loss of these cigarettes amounted to £500,000 and said that they could be linked to organised crime.