Parents stung by rising milk formula price

PUBLISHED : Wednesday, 16 March, 2011, 12:00am
UPDATED : Wednesday, 16 March, 2011, 12:00am

Parents are being hit extra hard by inflation, with the price of milk formula surging well ahead of the inflation rate of 2.4 per cent last year.

That's according to a survey of 33 brands of infant formula made by eight manufacturers, carried out by the Consumer Council.

Parents in the city have for months complained of a shortage of milk formula and rising prices.

The survey compared the prices and availability of products in 14 shops between April 2009 and February 2010; and from April 2010 to February this year.

It found the retail prices of 31 of the 33 products had risen - and the cost increase for 24 of those products had surpassed the inflation rate.

The shortage of milk formula at the beginning of this year was not as severe as it was at the end of last year, but some popular products were out of stock.

'Parents have to take into consideration whether the brands they are buying have a stable supply. If not, they should gradually shift to other brands,' council chief executive Connie Lau Yin-hing said.

The price of Mead Johnson's Enfapro A+ 2, a popular choice among both Hongkongers and consumers on the mainland, increased 12 per cent - the biggest price rise of all products surveyed.

Prices of four more Mead Johnson's products increased in a range of 8.1 per cent to 11.9 per cent.

The price rises coincided with the shortage problem, as Mead Johnson was also the brand most sought after by shoppers and parallel traders.

In December last year, nine out of 10 shops surveyed by the watchdog did not have stock of the company's Enfamil A+ 1 product. In February, six out 10 shops ran out of the product.

Another brand, Friso, was second to Mead Johnson in terms of the shortage problem and price rises.

At the end of last year, seven out of 10 shops had run out of one of Friso's infant formula products. Two months later, it was still missing from the shelves of half of the surveyed shops.

On average, prices went up almost 9 per cent for Friso's four milk formula products.

In the face of shortages and price rises, many consumers sought help from the council and the number of complaints it received rose from 40 in 2009 to 71 last year.

In the first two months of this year there were 51 complaints.

Ron Hui Shu-yuen, vice-chairman of the council's publicity and community relations committee, said strong demand inevitably drives up prices.

The council met representatives of the manufacturers, he said, and several of them have already boosted supply. Some now also had stockpiles to last for more than two months, he said.

In February, angry parents called for a departure tax to be levied on people who took unused supplies of infant formula out of Hong Kong. But Lau said as there were many options available for ensuring an adequate supply of milk powder, a departure tax might not be the best solution.

'Changing the tax system is a very complicated process,' she said. Manufacturers are drafting a code to ensure steady supply of the product.

A crisis of confidence in the mainland's milk formula since the tainted milk scandal in 2008 has sparked a surge in demand for foreign brands.

Supply of two brands became acute before the Lunar New Year, with parents complaining they could not buy enough infant formula in supermarkets and pharmacies.

In response, a number of manufacturers promised to increase supplies and deliver goods directly to homes. Mead Johnson said the company would get 420,000 tins of formula to the market to meet demand over the Lunar New Year. Friso said it would double its February supplies compared with a year earlier.

Representatives from Mead Johnson and Friso were not available for comment yesterday.