Chinese bulk buying of milk powder angers Australian moms

November 16, 2015 08:38
Photos posted by Jessica Hay show a group of customers in a Melbourne supermarket with carts loaded with cartons of milk powder as one woman stands guard over the three cans remaining on the pallet. Photo: Facebook

A young mother went to her local supermarket to buy milk powder for her baby son.

Jessica Hay saw four people pushing carts containing 50 cans of one of the best brands toward the checkout counter.

She was so angry that she put a photograph of the cans on the internet and wrote a message of protest.

This was not Sheung Shui or Tuen Mun but Melbourne.

The mass purchase of milk powder by Chinese tourists and traders, in stores and online, has forced major supermarkets to put a limit on purchases by individuals and put up notices in Chinese explaining their policy.

A can of one of the most popular brands costs A$30 (US$21.30); add the cost of shipping to China, and you reach 180 yuan (US$28.10).

It is being sold online on Taobao for 220-490 yuan.

Hay went to her local branch of retailer Woolworths on Nov. 7.

Another customer begged the cashier not to allow the sale of the 50 cans, but in vain.

“My blood was boiling for the mothers having problems finding [A2 Platinum, a brand of formula] for their babies,” said Hay.

“I was feeling sensitive, because I have got a newborn.

"If [those customers] were with babies, it would be understandable.

"But it felt like a smooth operation, like they did this all the time.”

The shortages and public anger over them may force the government to intervene.

Australia has one of the world’s most advanced dairy industries, and its products are in demand around the world.

When consumers buy direct from Australia, they know they are getting the genuine product.

There are different categories of Chinese buyers – tourists who take the cans home themselves; students who buy and send product home as a side business; and traders who have turned this into a full-time business.

In addition, there are people in the mainland who buy the cans online.

Last month,, the second largest e-commerce site in the mainland after Taobao, launched its “Australian Mall”, which sells Australian food at prices up to twice the retail price in Australia.

In the central business district of Melbourne, logistics companies that specialize in shipping food to China have opened.

Some clients send seven boxes a week to China, each with six cans.

These items are considered as a personal parcel and avoid the import tax of 30-40 per cent on milk powder.

One company ships five tonnes of product a week, mostly milk powder and some health supplements and vitamins.

This strong demand has caused shortages in supermarkets and other outlets in major cities, including Adelaide, Sydney and Perth as well as Melbourne.

Earlier this month, a group of 25 mothers wrote an open letter to Woolworths, one of the biggest retailers, demanding that it limit purchases to four cans per person.

In response, the company has ordered its stores to set a ceiling of eight cans per person.

Other outlets limit buyers to as few as two.

Under the Customs Act, milk powder is not a restricted or prohibited product in Australia, and the country’s border force does not control its import or export.

The Sydney Morning Herald reported last week that Rasad Merchant, the owner of Couriers of India, had refused to ship milk powder, in protest at his inability to find a tin of A2 Platinum powder for his 18-month-old child.

Merchant said that his decision would cost him A$10,000 a month in lost business.

He called on the government to follow the example of Hong Kong and New Zealand to introduce laws against parallel exports.

“It should be a restricted item, like pharmaceuticals,” he said.

The response from the dairy industry has, of course, been different.

One of the most popular brands is A2 Platinum.

The company was founded in New Zealand in 2000 and produces all its infant formula in that country.

It said that sales of its infant formula were likely to triple this financial year.

“We have had significant growth on online sites such as Alibaba and also at retail level at grocery and pharmacy stores where Chinese tourists often buy products on trips and taking it back with them,” the company said.

“We have enormous traction with Chinese nationals.”

Peter Nathan, the firm's chief executive in Australia, said it was delighted that its Platinum brand had become desirable in China and was considering a new plant in Australia to meet the soaring demand.

The government is watching the situation closely.

Under World Trade Organization rules, if the purchase of milk powder created a ‘critical shortage’, it could impose restrictions as the exporting country.

It is another example of Chinese purchasing power being felt around the world.

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A Hong Kong-based writer, teacher and speaker.