Parallel trading

Government set to crackdown on infant formula trading

Milk powder will be a 'reserved commodity' to stop cross-border traders buying up supplies

PUBLISHED : Friday, 01 February, 2013, 12:00am
UPDATED : Friday, 01 February, 2013, 4:33am

The government is likely to announce measures to crack down on the cross-border trading of infant formula today, the South China Morning Post has learnt.

Making infant milk formula a "reserved commodity" like rice is the main solution among a basket of measures the administration is now considering, a government source said.

"We are studying the related ordinance in details in order to stop parallel trading activities," the source said after an interdepartmental meeting yesterday.

The move to add the baby product under the Reserved Commodities Ordinance may take weeks to take effect after a proposal of amendment is submitted to the Legislative Council. But it is believed to be one of the quickest ways to ban parallel trading, where people buy stock tax-free in Hong Kong to resell it in mainland China at a profit, which is widely seen as the major reason for an acute shortage and inflated prices of the products.

The government would then set a quota to limit visitors from taking more than a few tins of powder over the border. Executive councillor Regina Ip Lau Suk-yee, who proposed the measure, has suggested that each traveller be allowed to carry two cans of formula out of the city at most.

Executive Council convenor Lam Woon-kwong backed the amendment and told the Post: "It is the right way forward."

Other methods - such as setting up a government centralised hotline for local mothers to place orders for formulas, and blacklisting retailers who use dubious sale practices - have been discussed among various options to ensure stable supplies.

The government tightened inspections of parallel traders yesterday, with several police cars stationed outside the Advanced Technology Centre in Sheung Shui, a favourite staging point for the traders and where the Post discovered hundreds of boxes containing formula being hoarded last week.

Local mothers continued to complain yesterday of shortages of their favourite brands as they reported even larger crowds of mainland parallel traders possibly making last-ditch efforts to stock up. At 4pm, hundreds of the traders with boxes of infant formula were queuing outside Sheung Shui MTR station heading back to the mainland.

A mainland woman in her late 40s, who refused to give her name said: "My friends in Shenzhen asked me to help them to buy [milk powder]. Every time I come [to Hong Kong], I carry as many cans as I can."

Internet users said traders were scrambling to buy powder in places such as Sheung Shui, Mong Kok and Tseung Kwan O.

One local mother said over the internet that she had to travel to Shenzhen to buy a tin of Hong Kong milk powder as she was unable to buy one in the city. A rumour that a mother bought a fake tin of Mead Johnson sparked panic among Hongkongers. The woman, who allegedly bought the tin from a drug store, became suspicious as it tasted much sweeter than normal formula.

The Medical Association yesterday advised parents to change the brand of formula for their children if they there unable to get their usual one.