Economy

Parents set to suck up baby formula price hike

By Eric Jou (China Daily)
Updated: 2010-07-27 11:52

Baby formula prices are likely to hit record highs when a proposed overhaul of customs regulations affecting the product comes into effect.

Slated to come into effect on Sept 1, the new regulations will limit the weight of baby formula that travelers can bring into the country and that shippers can transport - from the current 25 kg to a substantially lower 1.8 kg.

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In the past, people were able to bring in tax-free a total of 27 cans of formula, each weighing 900 grams.

After the regulations take effect, people will only be allowed to bring in two cans tax-free.

The change is aimed at preventing illegal imports from being falsely categorized as personal import and export.

"I currently have friends overseas that send me baby formula," said new parent Wang Hong. "It's cheaper for me to buy cases of baby formula and have them sent over to me from New Zealand.

"Plus, my baby prefers New Zealand formula over the ones available in China."

With the new regulations, formula brought in from Hong Kong, Macao or Taiwan that weigh more than the allowed new maximum will incur a 400-yuan fine. Shipments from overseas will receive a 500-yuan fine.

The price of shipping makes mailing smaller batches too expensive for parents.

Parents are bringing in baby formula from overseas for various reasons. Domestically bought baby formula is often more expensive than bulk-bought foreign baby formula. Parents also like the stringent product safety standards that overseas goods are subjected to.

"It costs more for me to buy individual cans of formula here, than to have my friends in New Zealand send me formula," said Wang.

With the imminent changes, there is fear among parents who buy formula from import websites that prices will rise.

Wholesale and group-buy websites such as Taobao.com have yet to show an increase in the price of milk powders.

According to Taobao online store service agent, Wu Li Jun, the price of imported powdered milk formulas will remain unchanged until the regulations go into effect.

Parents are beginning to horde overseas baby formula before the new regulations make it too expensive to purchase the product.

"I think the only thing I can do now is to just buy as much as I can before the regulation sets in," said Wang.