The government is considering more aggressive measures to ensure a stable supply of milk powder for local residents after a new run on baby formula emptied stocks in local stores.

"The government is monitoring the situation and will take action to ensure supplies, but we won't resort to administrative measures which would be used only if the situation became dire for local supplies," Secretary for Food and Health Ko Wing-man said on Thursday. "The brunt of the government's efforts would fall on unscrupulous cross-border traders."

The territory has experienced intermittent shortages of milk formula triggered in large part by purchases from mainland visitors and parallel traders since 2011.

There have also been reports that traders are hoarding supplies and selling only to mainlanders at inflated prices.

The Consumer Council has also chimed in, expressing concern over recent rush for powdered milk. The council will meet with the administration and milk powder providers on Friday, seeking to ensure a steady supply for locals.

For its part, the council will study the root causes of the problem as well as cooperate with stakeholders to stabilize supplies, a spokeswoman said.

Other measures will include suggestions to suppliers to strengthen protection for local customers and liaising with mainland counterparts to see what collaborative measures might be taken.

The council is also posting supply information as well as regular market surveillance updates to keep parents in the know, while calling on suppliers to monitor retail outlets to guard against hoarding and speculation.

Council Chairman Wong Yuk-shan said his organization had received seven complaints this year to date, involving inadequate supplies of milk powder, as well as seven complaints about pricing.

Wong said some measures the government could consider included foreign restrictions on milk powder purchased for exports but added such a move could be difficult, given Hong Kong's status as a free port.

Reports of stores selling out of popular overseas milk powder brands have begun circulating. Mainland shoppers have been quoted as saying the yuan's purchasing power gives mainland purchasers a 30 percent discount.

The rush ahead of the lunar new year has reinvigorated local concerns over rising prices brought on by supply shortages.

The cross-border milk powder trade has become so lucrative that smugglers have entered the fray, with a recent Jan 18 bust yielding 112 cans of milk powder as well as diapers and batteries worth a collective HK$286,760.

Big purchases by mainland visitors has also put a strain on the powdered milk supply in the neighboring Special Administrative Region of Macao, where the Macao Chief Executive Fernando Chui Sai-on has initiated an inter-departmental effort to ensure a stable, long term supply while curbing irregular sales at retail chain stores.

Local reports have detailed irregular selling practices inducing a requirement that purchasers buy a minimum amount of a certain brand before they are permitted to purchase their preferred brand.

tim@chinadailyhk.com

(HK Edition 01/25/2013 page1)