Chinese milk it in formula scam

Written By Unknown on Minggu, 06 Januari 2013 | 20.01

A screen grab from a Chinese website. Source: Supplied

A CHINESE webpage advertising bulk orders of infant formula to buyers in China is getting its supplies from a major supermarket chain.

News Ltd reported this week that pharmacy and supermarkets shelves have been cleaned out of Australian and New Zealand name-brand powdered infant formulas after several health scares in China.

The Chinese website advertises that Karicare Aptimal Gold Stage 1 tins can be bought at Woolworths in Box Hill, Melbourne, for $22.49 each retail with the site organiser selling to buyers back home at about $37, an extra $15 per tin, or $90 profit per case of six. Express shipping costs another $63.

The site adds that the price will not be negotiated.

The webpage also advertises the availability of different stage infant formulas at the nearby Woolworths-owned Big W.

A translation of the site says it has a "sister" buy from the supermarket "100% genuine" formula.

As News Ltd reported yesterday, traders stand to benefit up to $700 a week, or more than $36,000 tax free from the scheme.

Woolworths said it was up to the discretion of staff to ensure sufficient supplies were in stock and to scrutinise any unusual purchases.

"While there is no specific limit set, our stores are encouraged to use a common sense approach to ensure stock is only sold in retail quantities'" a spokeswoman said.

On Taobao, China's equivalent of Ebay, there is a seller who claims to be the official agent for Nutricia, saying they have sold 28,354 tins of Karicare Gold Stage 1 formula in a month for $34 per tin.

Grey imports are an issue of concern for Chinese authorities who are unable to detect thousands of tins of formula coming through China Post or via express mail services.

"The tins that are coming through, they don't know what is in it. The product could be anything," said Charles Zhang, international sales manager for Victoria-based Milk Powder Solutions which exports exclusively to China.

"In November or December last year, in Canton province Chinese authorities destroyed a lot of tins that do not have any house certificate (from China Inspection and Quarantine) that were sent through grey areas," he said from China yesterday.

Chinese officials have tightened legislation surrounding baby formula since the death of six infants and 300,000 more being made ill by a locally manufactured formula contaminated by melamine in 2008.

The local formula market virtually collapsed after the 2008 scare and any imports must withstand much tighter testing procedures with locals preferring "clean and green" Australian and New Zealand products.

But exporting and registering products in China and organising efficient and reliable supply lines is also notoriously difficult, turning exporters away.

Nutricia, the maker of Karicare and Aptamil brands which have been favoured by illegal exporters, said it has gone from making 5000 tonnes three years ago to 20,000 this year but only a small amount was exported. Production capacity is to increase by a further 50 per cent over the next 12 months.


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