Parallel trading

Two-can limit on milk powder to stop cross-border traders

Cross-border market in baby formula leads to series of tough measures, with fines of up to HK$2 million and seven-year jail sentences

PUBLISHED : Saturday, 02 February, 2013, 12:00am
UPDATED : Saturday, 02 February, 2013, 8:44am

People departing Hong Kong will be limited to taking two cans, or 1.8kg, of milk powder in the latest government effort to crack down on trading by mainlanders that has led to shortages in the city.

The change, imposed under a legislative amendment and expected to take effect as soon as this month, was among a basket of measures announced by the administration yesterday.

Those found guilty of breaking the new rule could be fined up to HK$2 million or face seven years in jail.

But critics said the amendment would take too long, while lawmakers and mothers - struggling to find milk formula for their children - said traders may still stockpile powder and make multiple trips across the border to sell it in Shenzhen at higher prices.

Announcing the plan yesterday, Secretary for Food and Health Dr Ko Wing-man said it would not cause parallel trading to "drop to zero" but could "greatly discourage parallel traders from making a big impact".

He said the change to the Import and Export Ordinance would require Executive Council approval and theoretically could be passed this month.

Other measures were announced to help combat shortages in the meantime.

A 24-hour government hotline was set up yesterday for parents to place orders for seven major formula brands.

And mainlanders who repeatedly travel across the border with bulky packages could be blacklisted by the Immigration Department, with their names passed to the Shenzhen authorities.

Also, the MTR will tighten the weight limit for passenger luggage from the current 32kg to 23kg from Monday. Many mothers said the action was better than nothing, but some, together with a pharmacy owner, said the two-can limit may be too loose.

"There are such a large number of traders and they can each travel many times to carry their stock," one mother wrote on the internet forum Baby Kingdom.

The Hong Kong Retail Management Association said it hoped the measure would not affect the city's image as a free market and a shoppers' paradise.

Democratic Party lawmaker Helena Wong Pik-wan and NeoDemocrats said the measures would not prevent parallel trading in other commodities.

The NeoDemocrats called for the abolition of the multiple-entry permit scheme for mainlanders that has fuelled the surge in parallel trading.

But Secretary for Security Lai Tung-kwok said this was not the way to solve the problem and might lead to "negative impacts".

Executive councillor Regina Ip Lau Suk-yee said the government could still consider making formula a "reserved commodity" like rice. But Ko said: "We think [the limit] is the best way to pinpoint the problem."


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