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.
More than HK$1 million worth of milk powder seized in customs raid
Customs arrest two syndicate masterminds and five traders in raid on warehouse storing 4,500 tins of milk powder in Sheung Shui
Thomas Chan and Tony Cheung
Customs officials have seized more than HK$1 million worth of baby milk powder in a crackdown on a warehouse used to store the product for parallel-goods trading purposes.
The Customs and Excise Department seized the 4,500 tins of infant formula at the warehouse at Sheung Shui's Advanced Technology Centre yesterday. The 4,050kg of powder was worth about HK$1.1 million.
It was customs' largest milk powder seizure in a factory warehouse since the two-tin ban on travellers leaving the city kicked in last month.
In the raid, the officials arrested two masterminds of a parallel-goods trading syndicate storing the powder. The man and woman , aged 20 and 51 respectively, were both from Hong Kong.
Five parallel-goods traders - aged between 21 and 50, and all from Hong Kong - were also arrested at the Lo Wu border checkpoint. About 20kg of infant formula was found on them.
Chan Tsz-tat, customs' syndicate crimes investigation bureau divisional commander, said the two masterminds were found withdrawing stock from the warehouse and distributing it to parallel-goods traders near the Sheung Shui MTR station.
The traders travelled across the border several times a day, with at least two tins of milk powder each time, he said.
Chan said the syndicate involved more than the five traders nabbed, and that the department was still looking into the case.
The two masterminds would be charged with assisting in carriage of prohibited articles under the Import and Export Ordinance, he said. If convicted, they faced up to seven years in jail and a fine of up to HK$2 million.
On Saturday, customs chiefs said the continuing crackdown had resulted in 10 arrests in two days. They had tried to smuggle 110 tins of milk powder.
Meanwhile, in an interview with CCTV yesterday, Chief Executive Leung Chun-ying said his administration would review the two-tin ban after the needs of local mothers were ensured.
"I don't have a timetable [for dropping the ban] … I hope different [stakeholders] can co-operate," said Leung, who admitted his administration had yet to find a better solution to the problem.
"We hope to gain a better understanding of how local milk powder suppliers do business, and how [we can] better ensure local mothers [get] the milk powder they need, and [still] satisfy the demands of mainland and overseas consumers."
The local government's drastic curb on milk powder exports across the border raised eyebrows on the mainland and caused some confusion over the banned products.
Last month, Food and Health Bureau secretary Dr Ko Wing-man apologised to 12 mainland visitors who were wrongly arrested for trying to leave the city with tins of baby cereal.