Formula traffickers empty Europe's shelves to feed Chinese babies
Networks of baby-formula traffickers are shipping milk powder to Chinese parents, creating empty shelves in stores from Europe to Australia.
Chinese parents will pay premium prices - three or four times as much as domestic brands - for formula from Europe, where stores are limiting sales in the wake of the shortages.
Even the Chinese buyers are complaining. "It's getting harder to find milk powder, for each box I have to walk farther," said a mainland woman who lives in Germany and advertises baby formula online.
She is one of a small army of vendors working from homes across Europe, emptying shelves and causing shops to impose limits on purchases. "I started off sending the powder to family and friends," said the woman, a stay-at-home mother who says she makes a "small amount" from the business.
Some other vendors ran larger-scale operations, with one Chinese company owner boasting he employs 10 German staff.
One German exporter put a picture of empty supermarket shelves online writing: "I counted with the shop manager, there were eight metres of empty shelves ... all bought by Chinese people."
German media have seized on photos of empty shelves with Bild, Europe's largest newspaper, announcing in January: "Angry mothers stand in front of empty shelves ... because Chinese buy up our milk powder."
Some European stores have also begun to limit sales, with German pharmacy chain DM banning customers from buying more than three boxes of German brand, Aptamil, at a time. In Britain, major supermarket chains are reportedly limiting customers to two cans of formula a day, with dairy company Danone saying the move was to prevent bulk-buying for "unofficial exports to China".
"There are three types of people like us," one businessman involved in the trade told Sky News. "The first you get [are] students or visitors who get asked to send one or two tins back to family or friends. Then you get small and medium businesses like me," the man, based in northern England, said. "The third group of people are the biggest sellers. They buy directly from health distributors - the kind of people who supply supermarkets."
Hong Kong rolled out export restrictions in March, limiting the amount of cans people can take across the border to two.
Experts had warned the cap could contravene World Trade Organisation rules, which prohibit any quantitative import or export restrictions between its members.
Now a commercial exporter said he had lost half of all revenue thanks to the restrictions.
Man Kwok-kee, of Hang Lung Trading, the distributor of American company PBM Products and its AAA milk brand in China, said the government refused to give him a permit to carry goods by hand to the mainland.
Trade and Industry Department told him that only if he re-exports the goods using trucks would he be granted a permit, he claimed, which was not feasible for small orders.
"Only if there is an acute shortage of products would the government's decision to impose export restrictions be justified. I don't see any shortage of milk formulas but two brands," he said.