The influx of parallel traders who buy their stock tax-free in Hong Kong to resell it in mainland China at a profit is causing growing unrest. Residents of Sheung Shui, a town close to China's border, say the increase in parallel importers has pushed up retail prices and causes a general nuisance. Importers argue that their trade benefits the Hong Kong economy.
Parallel traders hoarding milk formula
Hundreds of tins of milk stashed at warehouse in Sheung Shui as angry local mothers complain
Emily Tsang and Amy Nip
Parallel traders from the mainland are hoarding hundreds of tins of infant milk formula in the city as local parents struggle to buy supplies for their children.
A South China Morning Post investigation has found hundreds of boxes containing various brands of formula stored at the Advanced Technology Centre in Sheung Shui.
The building is a 10-minute walk from the MTR station and a favourite staging point for parallel traders, who are tryng to avoid paying hefty mainland taxes on goods by couriering the products across the border.
Milk formula brands that were scarce in North District pharmacies and supermarkets, such as Mead Johnson and Friso, could easily be found in the centre among stacks of boxes of food. The tins are taken to the centre in carts and trolleys and then repacked by the traders before they headed to the MTR station to take the short journey to the border checkpoint.
As shortages of certain brands of formula emerged this week, apparently because of mainland tourists' pre-Lunar New Year shopping sprees, the city's health minister yesterday warned retailers not to stockpile or sharply raise the price of formula.
"Hong Kong scrambles for milk formula", Video by Hedy Bok
"I urge retailers and pharmacies not to take advantage of current circumstances, as it would affect the interests of Hong Kong as a whole," Secretary for Food and Health Dr Ko Wing-man said on RTHK radio.
Also making such calls is the Consumer Council, which will meet manufacturers of major brands tomorrow in an effort to ensure adequate supply during Lunar New Year.
The watchdog received seven complaints about milk formula being sold out in from January 1 to 23. Last year as a whole, it received 15 complaints.
Angry mothers continued to complain yesterday, adding that their phone calls to the hotlines of several manufacturers failed to connect.
Lau Oi-kwok, chairman of Hong Kong General Chamber of Pharmacy, said he had heard rumours that pharmacies were being paid an extra HK$40 per tin of formula that they put aside for mainlanders.
One Hongkonger called an RTHK radio programme to report a dubious sales practice at one pharmacy. He was told that a certain brand of formula was out of stock and his Putonghua-speaking niece could buy two tins in the same store just two minutes later, but with an extra charge of HK$100 per tin.
Ko said the bureau would consider measures to crack down on unfair retail practices, such as stockpiling and price rises, but refused to elaborate.
"We will pinpoint the problem and then tackle it. But we do not wish to use administrative methods to control supply, as that would be a very irregular method," he said.
He acknowledged that a shortage existed. The dearth of formula comes even after major milk manufacturers promised to increase supply and chain stores pledged to limit customers to purchases of three tins per visit.
"We will check to see if people have been hired to make repeated visits to shops to buy formula."