Retailers risk being blacklisted by infant-milk-formula suppliers if they use dubious sales practices that cause shortages, and prosecuted if they break laws, the health chief said yesterday.
Secretary for Food and Health Dr Ko Wing-man urged consumers to report abuses.
"We understand there may be some short-sighted retailers who are taking advantage by inappropriate sales practices ... such as co-operating with parallel traders. This could lead to a shortage and affect consumers' confidence over the supply," he said.
Ko was speaking after he and other government officials met representatives of formula manufacturers on the day the South China Morning Post disclosed that mainland traders had stockpiled hundreds of cans of formula in a Sheung Shui warehouse for sale over the border.
The minister said that while stockpiling or sharply raising prices was not illegal, major suppliers had promised to issue warnings to offending retailers.
"[They] do not rule out the possibility of suspending or stopping supply to these vendors," Ko said. "If any illegal practices have been involved, the government will make a prosecution."
Some brands have been in short supply this week, apparently because of mainland tourists' pre-Lunar New Year shopping sprees.
Mainland parents prefer foreign formula brands to domestic ones because of health scares such as the adulteration, revealed in 2008, of milk with the industrial chemical melamine, which killed six babies and made 300,000 ill.
An investigation by the Post found hundreds of boxes containing various brands of formula hoarded at the Advanced Technology Centre in Sheung Shui, a favourite staging point where parallel-goods traders collect and dispatch their products for resale in Shenzhen at higher prices.
In Macau, where there is also an acute formula shortage, a special ordering scheme was set up yesterday to allow local parents to receive up to five tins of formula a month. From Monday, parents will be able to sign up with the Macau health department for a membership card giving them priority when they place phone orders with suppliers.
Macau Chief Executive Dr Fernando Chui Sai-on said suppliers would deliver their products within a week of the order.