British shops ration baby milk as Chinese demand surges

LONDON Thu Apr 11, 2013 11:37am EDT

Shoppers browse the aisles in the Canary Wharf store of Waitrose in London January 23, 2013. REUTERS/Neil Hall

Shoppers browse the aisles in the Canary Wharf store of Waitrose in London January 23, 2013.

Credit: Reuters/Neil Hall

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LONDON (Reuters) - British shops are rationing sales of baby milk after Chinese visitors and bulk buyers cleared their shelves to send it to China, where many parents fear the local versions are dangerous.

The British Retail Consortium (BRC), 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 milk powder 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 powdered milk 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 baby milk 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."

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 powder to export to China, one businessman involved in the trade told 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."

SOLD OUT

Supermarkets in Britain put up signs telling customers they could only buy two boxes of milk powder 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 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 baby milk costing around 10 pounds ($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 milk 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 milk powder mainland Chinese could take back with them. It followed complaints of shortages and rocketing prices.

Beijing has tried to reassure people that milk powder and dairy products in China are now safe and rigorously tested. However, lax regulatory enforcement is still a problem. ($1 = 0.6525 British pounds)

(Additional reporting by Ben Blanchard in Beijing and Emma Thomasson in Switzerland; Editing by)

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