Opinion | Action needed to put a lid on trade in baby milk formula

With parallel trading of baby milk formula across the border still rampant, the Hong Kong government has understandably decided to maintain the “two-tin cap” on outbound travellers to safeguard adequate supply for local consumption. But the underlying problems remain unresolved and are spilling to foreign countries.

The restriction was never meant to be permanent when it was introduced in 2013 amid an outcry over widespread shortages of powdered formula, fuelled by an influx of mainland shoppers and people trafficking the goods for resale on the mainland. Yet it has been in place for six years now. Meanwhile, the number of breaches of the cap remain high at an annual 3,800, following a slight drop from 5,114 to 4,445 in the first two years. Since there is no sign of a significant decrease in violations and that visitor arrivals are expected to grow, the decision to keep the cap is justified. But unless better efforts are made to suppress cross-border parallel trading, the cap may be in place indefinitely.

Hong Kong is not alone in trying to prevent mainland buyers from snapping up the products. The rise of daigou, or surrogate shopping businesses, is causing growing friction in Australia and New Zealand. Investigations by local media have unearthed sophisticated syndicates specialising in bulk purchases of products like milk formula and health and beauty products for resale to mainland shoppers for profit. The local authorities have already stepped up efforts to crack down. But such trading is likely to remain because of a growing demand from mainlanders for quality foreign goods.

China has rightly responded to overseas unease over its expanding shopping appetite with a new e-commerce law that seeks to tax such businesses. But whether the situation can be put under control remains to be seen. As far as milk formula is concerned, the underlying issue lies with the lingering fears arising from the tainted milk scandal in 2008, which killed or sickened many babies and exposed a series of institutional inadequacies in food regulation. The problem should be addressed by measures that help restore consumer confidence in mainland products.