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.
Calm descends on Sheung Shui - for now
Chaotic mess of people and goods that marked border town in recent months dies down in the wake of a concerted government crackdown
Thomas Chan and He Huifeng in Shenzhen
The Sheung Shui MTR station, once jammed with hordes of people hauling bulging bags and hefty boxes, was a picture of calm yesterday in the run-up to new heavy-handed measures from the government to curb parallel trading.
In mid-afternoon - during the usual peak hours of parallel trading activities - only a handful of suspected traders were seen, after police and immigration officers carried out several raids against the transport of daily necessities across the border.
The latest crackdown came in tandem with the government's announcement of measures at 4.30pm to stem the outflow of infant milk formula.
The Immigration Department also said it would pass a list of suspected traders to Shenzhen authorities, who may blacklist or bar them from re-entry into Hong Kong.
In the past few months, an open area outside the station in the border town had been a chaotic mess of traders unpacking boxes of milk formula and stuffing the tins into their baggage.
Yesterday, an air of normality returned, with a few empty suitcases tied to the railings. But a man who claimed to be a Shenzhen tourist said he was making a last-ditch effort to grab as many tins as possible from dispensaries along Lung Sum Avenue nearby before the announcement.
"I'm aware of the [Hong Kong] government's new measures to crack down on parallel trading," he said. "We have to hurry up, otherwise we may fail to get [the milk formula] across the border." He and his wife bought 15 tins of Mead Johnson Enfapro A+2, saying the food was meant for their grandchildren.
In Shek Wu Hui, home to a cluster of pharmacies, much-sought-after brands were sold at staggering prices. A tin of Mead Johnson Enfapro A+1, priced at HK$294 in supermarkets, cost HK$350 in Po Ling dispensary.
A woman who appeared to be leading a team of traders said some traders had shifted their focus to other products, such as diapers and food. Her group was lugging tins of Pringle's potato chips by the dozen.
The government has set up a 24-hour hotline for local parents to place orders for milk formula.
An officer who took a Post call to the hotline said callers would be able to find out the maximum number of tins that could be ordered for different brands.
One mother said she hoped to see the government's intensified action put in place as soon as possible. "The two-tin limit could at least prevent [parallel traders] from buying boxes of milk formula," said Daisy Wong, mother of a six-month-old boy. "The government needs to ensure there are enough people to run inspections at the border checkpoints."
Even so, another mother said she was worried that the prices of highly popular brands might not drop. "The supplies [of some brands] are really scarce."
Meanwhile, seven major makers of milk formula reassured the public that they had abundant stocks and would maintain communication with retailers to ensure stable supply.
In Shenzhen, groceries selling mainly baby products said they were nearly running out of milk formula. They expected the prices to soar because of Hong Kong's new measures. The goods sold at those stores were mainly bought from parallel traders.
A tin of Mead Johnson milk powder is now sold at 290 yuan (HK$358) in Shenzhen. Mainland mother Wendy Liu said she had resorted to buying an Australian brand online.
Steps officials will take to control parallel trading of infant formula
1 Amend Import and Export Ordinance to restrict number of tins of infant formula travellers can carry to two, or 1.8kg in total (done within this month)
2 A 24-hour government hotline for parents to order formula: 3142 2288 (from 6pm yesterday)
3 Lower the MTR's maximum weight limit for passenger luggage on the East Rail Line from the current 32kg to 23kg (starting Monday)
4 Monitor suspicious travellers who carry commodities in bulk and cross the border repeatedly every day, denying entry on a case by case basis