Parallel trading

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.

NewsHong Kong

Limit set on cross-border trading of baby milk formula

PUBLISHED : Friday, 01 February, 2013, 7:49pm
UPDATED : Friday, 01 February, 2013, 8:11pm
 

The Hong Kong government cracked down on the cross-border trade in baby milk formula on Friday, limiting visitors to taking two tins of milk powder when they leave the city, among other restrictions.

The goal is to ensure there is enough baby formula in the stores for local mothers’ needs, after many complained of shortages caused by mainland traders buying in bulk.

The new measures also include tighter weight restrictions on luggage on the MTR, tip-offs to Shenzhen customs officers about suspicious travellers, and a milk formula hotline for Hong Kong mothers.

Last week the government secured increased supplies from milk formula manufacturers. But on Thursday, Secretary for Food and Health Dr Ko Wing-man said more had to be done because the shortage had not eased.

At a press conference on Friday, Ko said: “[Since] the shortage of infant milk formula has much to do with parallel trading … we need to restrict exports.”

People crossing the border to the mainland – including visitors and Hong Kong residents – may take no more than 1.8kg of milk formula, or two tins, Ko said.

The new measures will require amending the Import and Export Ordinance, which could be completed this month, Ko said.

In another move on Friday, the government set up a 24-hour, seven-day-a-week hotline to help Hong Kong mothers make bookings to buy milk formula.

The service covers seven major brands used by local mothers, accounting for more than 90 per cent of the market, Ko said. It started operating at 6pm on Friday.

In a further measure, Secretary for Security Lai Tung-kwok said Hong Kong would inform Shenzhen customs when officers at border check points spot suspected parallel traders. The mainland side would stop the suspected travellers and inspect their luggage for any smuggled goods, Lai said.

Lai and Ko were speaking at the same news conference, also attended by Secretary for Housing and Transport Anthony Cheung Bing-leung.

The government will also tighten the weight restriction on passengers’ luggage on the MTR East Rail, which traders use to transport their heavily loaded trolleys to the mainland.

From Monday, the maximum weight allowed will be 23kg, down from the current 32kg, Cheung said.

Hours before the new measures were announced, cross-border traders were rushing to stockpile milk formula on Friday morning.

In Yuen Long and Wong Tai Sin, dozens of people queued outside pharmacies to buy the milk powder, local media reported.

Most of them emerged from the stores pushing trolleys piled high with cans of milk powder, TV footage showed.

A Hong Kong mother said she visited several shops in Wong Tai Sin on Friday morning but could not find a single can to buy, after all stocks sold out within hours.

Many local mothers have complained about the difficulty of finding milk formula in stores because of bulk purchases by mainland tourists and parallel traders.

Milk powder from Hong Kong is popular on the mainland, where people have become sceptical about local products following a spate of tainted-milk scandals in recent years.

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