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British shops ration baby formula as Chinese demand surges

Kirsty Wigglesworth / AP

A sign limiting the purchase of formula hangs on the shelf in a supermarket in London, on April 10.

LONDON -- British shops are rationing sales of baby formula after a surge in sales thought to have been caused by the demand in China, where many parents fear the local versions are dangerous.

The British Retail Consortium, whose members account for 80 percent of the sector, said many stores had imposed a two-box limit on each customer to deter the "unofficial exports" to China.

Demand for foreign formula has been high in China since at least six infants died and 300,000 fell ill in 2008 after they drank milk laced with the industrial chemical melamine.

The scandal sapped consumer confidence in Chinese-made food and led to shortages of formula in Hong Kong and Australia as people bought boxes to export to China.

The rise of the middle-class Chinese working mother has greatly increased sales of formula in the world's most populous country.

Fast-growing markets like China support a global baby-food market worth an estimated $30 billion a year.

"The major retailers of baby milk -- supermarkets, chemists -- are restricting sales," said BRC spokesman Richard Dodd. "They have done this in response to some customers buying unusually large amounts. The irregular buying patterns are thought to be a result of unofficial exporting to China."

Sporadic shortages
The buyers include Chinese tourists and students who take a few cartons home with them or post them to relatives. There are also organized groups who buy large amounts of formula to export to China, one businessman involved in the trade told the U.K.’s Sky News.

"There are three types of people like us. The first you get (are) students or visitors who get asked to send one or two tins back to family or friends. Then you get small and medium businesses like me," the man, based in northern England, told Sky News.

"The third group of people are the biggest sellers. They buy directly from health distributors -- the kind of people who supply supermarkets,” he added.

Some supermarkets in Britain have put up signs telling people that they can only buy two boxes of formula per visit.

Shoppers in London said they had noticed sporadic shortages and had had to visit different chains to find a preferred brand.

"On Sunday, we couldn't get any in [leading supermarkets] Asda or Tesco and we had to go to Sainsbury's," said Lyn Patterson, walking with her grandson Jacob in Oxford Street, one of the capital's busiest shopping areas. "They're sold out all the time. But we've never run out - we always have a carton on standby."

Boxes of formula costing around $15 in Britain are on sale on Chinese websites for up to three times as much.

French food group Danone, which makes the Aptamil and Cow & Gate brands, apologized to British consumers and said it had increased production.

"We understand that the increased demand is being fuelled by unofficial exports to China to satisfy the needs of parents who want Western brands for their babies," it said.

Nestle, the world's biggest food company, said its milk products were unaffected.

Bulk buying in Hong Kong earlier this year prompted the government to restrict the amount of formula mainland Chinese could take back with them. It followed complaints of shortages and rocketing prices.

Beijing has tried to reassure people that formula and dairy products in China are now safe and rigorously tested. However, lax regulatory enforcement is still a problem. 

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