Infant formula and health supplement firms are taking a sharemarket pounding today following a Chinese crackdown on food and other consumer goods imports.

The Australian Financial Review reported that Alibaba's Tmall website was not allowing sales of long-life milk and milk powder made by Aussie dairy producer Murray Goulburn under its Devondale brand.

The crackdown follows the introduction in China earlier this month of a new tax regime for cross-border e-commerce, which included an 11.9 per cent tax on products purchased from foreign websites.

According to the AFR, the Chinese tax bureau issued a "positive list" last week of products that were allowed to enter the country via free trade zones.


Adult milk powder and long-life milk were reportedly excluded from the list, while infant formula had been cleared for import.

Despite that, baby formula shares are taking a beating today.

Shares in A2 Milk were down 5.3 per cent at $1.80 on the NZX at 1.30pm, while shares in ASX-listed formula exporter Bellamy's Australia were down almost 10 per cent at A$8.99.

Supplements maker Blackmores has seen its biggest one day fall, with its stock plunging almost 20 per cent in early trading to A$144 before recovering to A$159.8 by 1.30pm NZ time.

Meanwhile, the Chinese authorities are also tightening inspections on goods entering China with international airline passengers.

Travellers at Shanghai's Pudong Airport reportedly faced a two-hour wait at customs on the weekend as officials searched luggage and charged tax on products worth more than 5000 yuan ($1126) being brought into China.

Large volumes of infant formula, including A2's Platinum brand, are taken back to China by Chinese tourists who have visited Australia.

The AFR reported that the crackdown was part of a pledge by Beijing, which signed a free trade agreement with Australia last year, to protect domestic retailers by imposing higher taxes on imports.

It comes as a 1000-strong business delegation from Australia heads to China this week with Prime Minister Malcolm Turnbull.

Prime Minster John Key will be in Beijing and other Chinese cities next week as part of a visit that will include meetings with President Xi Jinping, Premier Li Keqiang and discussions around upgrading New Zealand's FTA with China which took effect in 2008.

A Kiwi business delegation is also heading to China next week.