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Following is a question by the Hon Mrs Regina Ip and a written reply by the Secretary for Food and Health, Dr Ko Wing-man, in the Legislative Council today (April 15):
Question:
Since March 2013, the Government has been enforcing the requirement that each person aged 16 or above may only carry, on his/her departure from Hong Kong within a 24-hour period, powdered formula for infants and young children under the age of 36 months (powdered formula) of a total net weight no more than 1.8 kilograms (commonly known as "restriction on powdered formula"). In order to understand the supply and prices of powdered formula, the Consumer Council conducted a survey throughout the 18 districts in Hong Kong during the pre-Chinese New Year period (i.e. the period between January 26 and February 11) this year. The survey results reveal that the overall shortage situation of powdered formula improved during the aforesaid period as compared to that in the same period last year, but the shortage rates in some districts were still on the high side. For instance, the shortage rates of several major brands of powdered formula in Po Lam, Tseung Kwan O, and Sham Shui Po were still over 20%, while those of individual brands of powdered formula in Tai Po and Sham Shui Po were even higher than 40%. Regarding price differences among drug stores, the price differentials of individual brands among drug stores in different districts also exceeded 26%. In this connection, will the Government inform this Council:
(1) of the respective numbers of prosecution and conviction cases involving violations of the restriction on powdered formula since its implementation (with a breakdown by quarter and control point); if such figures cannot be provided, of the reasons for that;
(2) whether it has formulated specific measures to resolve the lingering problem of serious shortage of powdered formula in individual districts; if it has, of the details; if not, the reasons for that; and
(3) regarding the problem that there are still marked differences in the prices of individual brands of powdered formula among drug stores in different districts, whether the Government has formulated specific measures to mitigate the problem; if it has, of the details; if not, the reasons for that?
Reply:
President,
(1) The quarterly breakdown figures of convicted cases in each control point involving violation of the Import and Export (General) (Amendment) Regulation 2013 (the Amendment Regulation) since its enactment are set out in Annex.
(2) To get a good grasp of the supply and prices of powdered formula at the local retail level, the Food and Health Bureau commissioned a consultancy firm in 2014 to conduct regular surveys. According to the results of the regular surveys, since the implementation of the Amendment Regulation, the supply of powdered formula at local retail stores was relatively sufficient compared to the situation in early 2013, and shortage of two popular brands of powdered formula slightly improved in 2014. However, these brands still experienced a certain degree of shortage in individual districts. We have shared the results of the regular surveys with the suppliers concerned and requested them to take active follow-up action to ensure stable and sufficient supply of powdered formula for local infants and young children. We will continue to urge suppliers of powdered formula to follow up the recommendations for improving the supply chain as proposed in the consultancy report (Note 1) .
We also encourage suppliers to promote various pre-order services (including the Coupon Scheme (Note 2) and order placement through their hotlines for home delivery or collection from chain stores) via channels such as the media and the Internet. We are of the view that pre-order services can act as a "dedicated supply chain" for local infants and young children, thus separating local demand from non-local demand. They play an effective role in ensuring sufficient supply for local infants and young children when powdered formula is in short supply. As such, in the face of a tight market situation, purchasing powdered formula through pre-order services is a preferred approach. Suppliers have pledged that parents of local infants and young children placing orders through pre-order channels will receive powdered formula in three working days (excluding Saturdays and public holidays) after confirmation of their orders. They have also undertaken to reserve enough stock of powdered formula for local infants and young children and to respond to all calls from customers within 24 hours.
Since pre-order services are effective in alleviating the pressure of demand when there is a shortage of powdered formula at the retail level, we have also commissioned a consultancy firm to conduct surveys to gauge the experience of parents of local infants and young children in purchasing powdered formula and their attitude towards using various pre-order channels. The survey results enable us to better assess the level of their understanding and acceptance of various pre-order services and assist suppliers in adjusting their strategies of promoting pre-order services.
We have submitted the above survey results to the Committee on Supply Chain of Powdered Formula (Note 3) to assist it in effectively advising the trade on ways to further improve the supply chain and promote the use of pre-order services by parents of local infants and young children.
We will continue to conduct the two surveys mentioned above, and follow up and monitor the improvements in the powdered formula supply chain undertaken by suppliers through the Committee on Supply Chain of Powdered Formula.
(3) Regarding retail prices, the findings of the above regular surveys revealed no price fluctuation in major chain stores and pharmacies. The prices remained stable during the survey periods. The retail prices in major chain stores were more or less the same as the suppliers' recommended retail prices, while the average retail prices in pharmacies were close to or lower than those in major chain stores. We are aware of the survey on the supply and prices of powdered formula conducted by the Consumer Council in 18 districts in Hong Kong before the Chinese New Year this year. The survey was conducted in a different way from the above regular surveys including the number of samples collected, the districts studied, etc. The results of the two surveys are therefore not directly comparable but we will continue to conduct the regular surveys and keep the retail prices in view, and follow up the matter with relevant suppliers where necessary.
Note 1: To assist the Government and the Committee on Supply Chain of Powdered Formula in examining the improvement measures on the supply chain proposed by suppliers of powdered formula, the Government commissioned a consultancy firm in 2013 to study these measures and make recommendations.
Note 2: Under the Coupon Scheme, parents of local infants and young children aged under 36 months can apply for coupons from seven major powdered formula suppliers (i.e. Abbott, Cow & Gate, Friso, Mead Johnson, Nestle, Snow Brand and Wyeth). Coupon holders are entitled to order powdered formula by presenting the coupons at designated pharmacies under the Hong Kong General Chamber of Pharmacy Limited.
Note 3: In July 2013, the Government appointed a Committee on Supply Chain of Powdered Formula to study and recommend to the Government measures to improve the supply chain of powdered formula. The Committee comprises 14 non-official members, including major powdered formula suppliers, retailers, parents, representatives from the logistics sector and the academia, and those representing consumer interests.
Ends/Wednesday, April 15, 2015
Issued at HKT 15:53
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