LCQ5: Supply and export control on powdered formulae

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Question:

Since 2013, the Government has adopted a number of measures to ensure a safe and stable supply of powdered formula for infants and young children under the age of 36 months (powdered formula). Such measures include the requirement enforced since March 2013 that each person aged 16 or above may only carry, on his/her departure from Hong Kong within a 24-hour period, powdered formula of a total net weight of no more than 1.8 kilograms (commonly known as restriction on powdered formula), in order to prevent parallel trading activities from diverting large quantities of powdered formula away from the supply chain in Hong Kong. Regarding the enforcement of the restriction on powdered formula and the supply of and demand for powdered formula, will the Government inform this Council:

(1) of the respective numbers of persons prosecuted and convicted each year since March 2013 for violating the restriction on powdered formula and, among them, the number of those involved in parallel trading activities; the penalties generally imposed on the convicted persons;

(2) of the demand for powdered formula in each of the past three years calculated on the basis of factors such as the number of infants and the breastfeeding rate; how such figures compared with the volumes of retained import of powdered formula in the respective years; and

(3) whether it knows the districts in Hong Kong where the problem of shortage of powdered formula occasionally emerges at present; when the authorities will conduct a comprehensive review of the demand for and supply of powdered formula?

Reply:

President,

(1) Since the Import and Export (General) (Amendment) Regulation 2013 (the Regulation) came into operation on March 1, 2013, the numbers of prosecution cases for contravention of the Regulation in 2013, 2014, 2015 and 2016 were 2 959, 5 160, 4 490 and 3 830 respectively. The numbers of convicted cases in 2013, 2014, 2015 and 2016 were 2 947, 5 114, 4 445 and 3 802 respectively.

During the said period, the penalties for these convicted cases included a fine of $200 to $ 150,000, immediate imprisonment (between one and 180 days), Community Service Orders, and Probation Orders, etc.

The Government does not have statistics on the volume of powdered formulae imported into or exported out of Hong Kong in the form of "parallel trade".

(2) According to the Census and Statistics Department, the volumes of import of powdered formulae in 2014, 2015 and 2016 were 56 million kilogrammes (kg), 54 million kg and 59 million kg respectively; the volume of re-export of powdered formulae were 9 million kg, 12 million kg and 17 million kg respectively; while the volume of retained import of powdered formulae were 47 million kg, 42 million kg and 42 million kg respectively.

(3) We have put in place an established mechanism to monitor the demand and supply of powdered formulae in Hong Kong. We have been conducting surveys, through consultancy firms, on the supply and price levels of powdered formulae at the retail level since the Regulation has come into effect in 2013. We have also set up the Committee on Supply Chain of Powdered Formula to keep track of the operation and effectiveness of the export control on powdered formulae.

The results of the aforementioned surveys indicated that the operation of the supply chain of powdered formulae had continued to improve. Nevertheless, there were different degrees of shortage of products of individual brands in certain districts. We will continue to conduct the surveys. Also, we will continue to keep in view and optimise the supply chain of powdered formulae with the trade and the relevant stakeholders to ensure its effective operation, having regard to the market circumstances.

The Government notes the concerns of different stakeholders about the Regulation. By and large, supply of powdered formulae in Hong Kong primarily serves the needs of local infants and young children. The policy objective of the Regulation is to safeguard stable and adequate supply of powdered formulae to local infants. As the above figures reveal, the volume of import and re-export of powdered formulae have increased in general, while the volume of retained import of powdered formulae has remained stable. The number of prosecution and convicted cases for contravention of the Regulation has continued to decrease. The operation of the supply chain of powdered formulae has continued to improve and the trading of powdered formulae has been getting smoother. The Regulation has, to a certain extent, struck a balance between addressing the needs of local infants and young children and safeguarding free trade and commerce. We will continue to keep in view the operation of the supply chain of powdered formulae, and review the effectiveness of the relevant measures.

Ends/Wednesday, June 7, 2017

Issued at HKT 16:19

Issued at HKT 16:19

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