The Hong Kong government’s recent listing of baby formula as a “reserved commodity” and a 1.8kg per person per day export limit has sparked widespread criticism—as well as becoming a hot topic at China’s annual session of parliament [the Lianghui, or “Two Meetings”] over the past week.
Hong Kong has suffered shortages of baby formula due to mainland travelers and professional traders buying up supplies, with stocks of some imported brands running out. Meanwhile, some merchants have taken the opportunity to hike prices, leaving Hong Kong locals struggling to afford formula for their infants.
So earlier this year the Hong Kong government listed baby formula as a “reserve commodity,” and on March 1 implemented an export restriction, limiting the quantity of baby formula an adult traveler may take out of Hong Kong to 1.8kg—about two tins. Anyone found guilty of breaching those limits can be fined up to half a million Hong Kong dollars and imprisoned for two years.
Although officials with the Hong Kong Food and Health Bureau have repeatedly stated the move is to ensure supply for Hong Kong families and not targeted at mainlanders, the restrictions and harsh punishments have caused outrage.
Zhang Xin, CEO of SOHO China, asked on her microblog: “Why don’t Hong Kong merchants increase supply to meet demand from the mainland? Hong Kong is a free port, any formula maker in the world could send stocks there, so why the limit?”
Well-known microblogger and head of Innovation Works Li Kai-fu also questioned the new rules on his Sina microblog: “Prison for taking a bit too much baby formula? You wouldn’t hear of it in a fairytale!”
Hong Kong Move Criticized
With all the public debate, the matter naturally became a topic at the Lianghui.
According to the South China Morning Post, mainland National People’s Political Consultative Congress members asked if the curbs were too selfish and “a bit over the top.”
NPPCC member Wang Xudong said the restrictions “just takes care of local children without considering our mainland babies.”
Henry Tang Ying-yen, a Hong Kong NPPCC delegate and former Chief Secretary of the Hong Kong administration, said that baby formula is freely traded, and that he hoped the restrictions would be a temporary measure.
Of course, alongside the criticism of Hong Kong’s moves, there was also discussion about the quality of mainland milk formula.
Several days ago newly appointed NPPCC spokesperson Lu Xinhua commented that a lack of confidence in mainland products were the cause of the buying in Hong Kong, but that “99 percent of mainland formula meets quality standards.”
Cui Yongyuan, a NPPCC delegate and television host, admitted to the media that he didn’t trust local formula: “How am I meant to know where the 1 percent is?”
Hong Kong NPPCC delegate Michael Tien said that for a mother even a 99.999 percent pass rate wasn’t enough.
Yang Yuanqing, NPPCC member and CEO and chairman of the Lenovo Group, said that 99 percent wasn’t enough—it should be 100 percent to put people at ease.
Perhaps agreeing that 99 percent wasn’t persuasive enough, Lu Xinhua corrected himself on March 6th: “I went back to check the figures from the Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ), and the pass rate for formula is 99.1 percent—I understated it by 0.1 percent”
But it seems the spokesperson had failed to speak to AQSIQ before adding to his earlier statement—AQSIQ deputy director Yang Gang had just given the media a different line, saying that 86 percent of domestic dairy products met standards, compared to 98 percent of products produced for export.
Dairy expert Wang Dingmian recently told the media that: “The anger of mainland consumers at the Hong Kong curbs shows that people aren’t confident in mainland dairy products.”
One Beijing mother-to-be told chinadialogue that she had read a lot of news articles about formula quality problems, and wasn’t confident in domestic formula.
Baby Formula Food Scare
In 2008, almost 10,000 infants required treatment after it was found Sanlu brand formula had been contaminated with a chemical called melamine.
A sequence of dairy product safety scares followed at major brands including Yili, Mengniu, and Guangming. And so mainlanders lost faith in domestic dairy products.
In a November 2011 report in the People’s Daily, experts exposed the hijacking of the new national standards for dairy products by the dairy firms themselves—many quality measures were actually lower than in the existing standard.
Shockingly, as of the end of 2012, six officials who had been investigated over the Sanlu scandal had returned to work. Sun Xianze, former head of the food safety regulation department at the State Food and Drug Administration, was disciplined due to the scandal. But in September 2012, he reappeared, now deputy head of the administration.
So despite the curbs, many mainland parents will still avoid domestic formula, and are looking to Macau or overseas. With many mainland mothers and smugglers heading for Macau, the island is seeing a run on many formula brands. NPPCC member and deputy chair of the Macau Federation of Trade Unions Chen Jinming, speaking at the Lianghui in Beijing, said that if formula supplies started to run out in Macau, similar restrictions to those imposed in Hong Kong may be put in place to stop mainlanders and smugglers clearing the shelves.
And battle lines have even stretched overseas. According to Europe Times, a Chinese-language newspaper published in Europe, a UK supermarket banned a Chinese man from all its stores after he purchased over one hundred tins of formula in a few days. Limits on formula purchases are in place or under consideration in the U.S., Australia, New Zealand, Holland, Germany, and Macau.
Michael Tien proposed a solution at the Lianghui: Hong Kong, which is more trusted, can certify formula as safe, and it could then be sold to mainland mothers through outlets appointed by the mainland government.