Christopher Adams

The Business Herald’s markets and banking reporter.

Baby formula beats drug arrests at Hong Kong border

Photo / Thinkstock
Photo / Thinkstock

Arrests of infant formula smugglers have surpassed those of heroin and other drug runners at Hong Kong's border since it introduced new laws on March 1 restricting how much baby milk - much of which is made in New Zealand - can be carried into mainland China.

Food contamination crises - including the 2008 melamine scandal in which six babies died after consuming tainted milk - have left Chinese parents distrustful of locally-made formula brands, driving a seemingly insatiable demand for imported products.

As of April 23 Hong Kong Customs had arrested 879 people carrying a 8841kg of baby formula, according to a report by the Bloomberg news agency.

Only 420 people were arrested at Hong Kong's border last year for carrying restricted drugs, including heroin, cocaine and ketamine, an anaesthetic, Bloomberg said.

The news agency reported that Hong Kong Customs had busted an infant formula syndicate in possession of 4000kg of product, worth more than NZ$166,000.

Hong Kong's Government introduced the restriction of two, 2-pound cans of formula per traveller in response to fears of an infant formula shortage caused by Mainland Chinese travellers, as well as professional traders, carrying large volumes of milk powder back to China and selling it at a hefty premium.

In September New Zealand's Ministry of Primary Industries and Customs Service began a crackdown on unlawful infant formula exports, mostly to China, which the agencies said had reached $150 million a year.

Under the Animal Products Act, only registered exporters can export dairy material, including infant formula. See a Q & A on the rules here.

The value of New Zealand's baby formula exports grew from $63 million in 1999 to $753 million in 2009, according to the Food & Grocery Council.

- NZ Herald

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