Replies to LegCo questions
LCQ18: Milk powder supply
Following is a question by the Hon Chan Hak-kan and a written reply by the
Secretary for Food and Health, Dr York Chow, in the Legislative Council today
(February 16):
Question:
It has been reported that many travellers and "couriers" from the Mainland buy
milk powder in Hong Kong, causing a short supply of as well as a speculative
surge in the prices of milk powder locally, and the North District in the New
Territories, which is adjacent to the border, is most affected in that some
pharmacies sold out all their milk powder in less than 10 minutes after
replenishment. Some parents have initiated a campaign on the Internet to urge
the Government to levy a milk powder export tax as a means to combat the
situation. In this connection, will the Government inform this Council:
(a) given that the Secretary for Food and Health revealed on January 28 that the
authorities had contacted the trade which supplied milk powder and it considered
that there was sufficient supply on the market, of the details of the contact
between both sides; whether the trade had provided any data or information to
show that there was sufficient supply, and what concrete arrangements had been
made to further increase the supply of milk powder on the market;
(b) whether it has assessed the shortage of milk powder at the retail level and
whether there was stockpiling by retailers, if so, of the details, and the
measures to be adopted to solve the problem; if not, whether it will consider
conducting the aforesaid assessment;
(c) of the concrete measures to stabilise milk powder prices in Hong Kong and
avoid speculative surge of prices;
(d) given that quite a number of travellers from the Mainland came to Hong Kong
during the Chinese New Year, whether the Government has assessed if the problem
of milk powder shortage has further been aggravated; and
(e) whether it will consider taking any measure, including studying the
aforesaid proposal of the parents, to restrict bulk purchase of milk powder by
any person; if it will, of the details; if not, the reasons for that?
Reply:
President,
The Government cares about babies' health and pays particular attention to the
safety and supply of milk powder. Since the reports of possible shortage of
infant formula, we have been proactively liaising closely with milk powder
suppliers, the Hong Kong General Chamber of Pharmacy and major retailers. We
were assured by the suppliers that they had sufficient stock, and that they
would increase supply to cope with the growing market demand. Our reply to
various parts of the question is as follows:
(a) The Food and Health Bureau and the Consumer Council have been keeping close
liaison with major milk powder suppliers, which have responded positively by
increasing the supply of infant formula in the market. According to the trade,
one of the major suppliers has been shipping in milk powder to Hong Kong by air
since the last quarter, and its supply in February this year will be more than
twice of that last year. Another major supplier has made continuous effort to
increase the supply in the Hong Kong market over the past four years and its
supply in 2010 was more than doubled when compared with that in 2006.
The major suppliers of milk powder have also set up free membership systems and
they provide delivery service to Hong Kong customers. They also make use of
different channels to enhance communication with Hong Kong parents (e.g. short
messaging service). Their hotline service advises members of the retail outlets
with stocks, and assists parents in placing orders for milk powder. Voice mail
service was also provided during the Lunar New Year holidays.
Retailers have also been closely monitoring the sale situation, particularly
those retail outlets in areas near the boundary and along the East Rail Line.
They have actively approached the suppliers to discuss arrangements for
increasing supply and delivery to expedite replenishment, so as to meet the
demand of the market. Some retail outlets have set sale quota for certain brands
of milk powder to cater for the demand of local citizens.
(b) According to our assessment and the information obtained from the trade, the
overall supply of infant formula in the market is sufficient. The shortage in
the supply of particular brands at some retail outlets was mainly due to the
great demand at these retail outlets at certain times. It is basically an issue
of demand and supply.
(c) We believe that the measures mentioned in our reply to part (a) will help
stabilise the supply and price of milk powder. We will continue to keep the
market condition in view.
(d) The suppliers and retailers of milk powder have actively taken steps to meet
the market demand. During the Lunar New Year holidays, the supply of milk powder
was stable without any report of serious shortage.
(e) Hong Kong has been pursuing a free trade policy and is well known for its
simple tax system. In considering whether a duty should be imposed on the export
of a certain product (e.g. milk powder), we must consider thoroughly various
factors, such as whether it is in line with our free trade policy, the
implications on our tax system, and whether the imposition of such tax is the
most effective way to stabilise the local supply. Having taken into account
various factors, we do not consider there is a need to impose a duty on milk
powder when being taken outside Hong Kong.
Ends/Wednesday, February 16, 2011
Issued at HKT 13:01
NNNN