Parallel trading

Government goes for faster formula to tighten control of milk powder

PUBLISHED : Saturday, 02 February, 2013, 12:00am
UPDATED : Saturday, 02 February, 2013, 4:43am


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The government has opted for the quicker of two legal options to tighten control over the supply of milk formula.

By amending subsidiary legislation under the Import and Export Ordinance, the government will set the maximum amount of formula a person can take out of Hong Kong at two cans.

This is a different approach from one suggested earlier by lawmaker Regina Ip Lau Suk-yee, who wanted to see milk formula added to the Reserved Commodities Ordinance along with rice.

This would restrict its import and export but would also require registered stockholders to keep a reserve of milk formula at all times.

"It would empower the government to control the entire supply chain," Ip said, adding that it would be a more complicated process and a less speedy option.

Federation of Restaurants and Related Trades president Simon Wong Ka-wo said amending the export regulations was a more straightforward approach.

He said that while there was only one rice importer there were numerous manufacturers and sellers of milk formula and the government would have to spell out how it would regulate them all.

He said he believed the limit of two cans per person would increase the costs of parallel traders and drag down total demand for milk formula.

Such a move would also create a smaller incentive for pharmacies to accumulate stock.

Food importer Lee Kwong-lam said milk formulas were different from rice and it would be difficult to keep a central reserve.

"Rice from Vietnam and Thailand could be interchangeable. But one milk formula brand can be quite different from another," he said.