Panel to study milk powder supply

The two-tin curb on infant formula may be lifted if the shortage eases, bureau says

PUBLISHED : Thursday, 04 July, 2013, 12:00am
UPDATED : Thursday, 04 July, 2013, 4:07am

A committee has been formed to review the supply of infant formula in an effort to stop shortages - a move that could lead to the lifting of the two-tin limit for departing travellers.

Announcing this yesterday, the Food and Health Bureau said the controversial curb might be removed if the 14-member panel came up with "effective and sustainable measures" to ensure local supply.

The limit, imposed on March 31 after mainland traders buying milk powder for sale in Shenzhen were blamed for shortages here, has been criticised for damaging the city's free-market reputation.

"The supply chain failure in relation to powdered formula had a major bearing on the serious shortage of powdered formula early this year," a department spokesman said. "We therefore consider that suppliers of powdered formula must step up their efforts to improve the supply chain management."

The panel, chaired by Retail Management Association chairwoman Caroline Mak Sui-king, includes representatives of milk powder suppliers such as Mead Johnson and Friso that supply about 60 per cent of the local market. Other members include General Chamber of Pharmacy chairman Lau Oi-kwok and Consumer Council chief executive Gilly Wong Fung-han. Two parents and several scholars and field representatives in marketing and logistics complete the list.

Lau said the panel would hold its first meeting tomorrow.

Local suppliers have been asked to improve the supply chain in four areas, the spokesman said. These are increasing the efficiency of stock replenishment, increasing distribution capacity at wholesale level, boosting the capacity of customer hotlines and setting up services for advance orders from retailers.

The new measures will be tested during a holiday - either the National Day golden week in October or the run-up to next Lunar New Year.

"If the measures are proven to be effective and sustainable, we will consider repealing the Import and Export Regulation 2013," the spokesman said, referring to the measure imposing the limit. A consultancy firm has also been hired to examine the improvement measures proposed by the trade.

It comes as the National Development and Reform Commission is probing whether formula suppliers have been engaging in monopolistic behaviour and inflating prices on the mainland.

In February, a shortage of several big brands was said to have been worsened by mainland shoppers making Lunar New Year purchases.