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Ko Wing-man, Secretary for Food and Health of the Hong Kong government, said there is not yet a timetable for the elimination of restricting cross-border export of milk powder.
The restriction, imposed in March, bans travellers from taking more than two cans of milk powder without approval.
Ko told the APD on Wednesday that according to the result of a pressure test concerning the supply chain for infant formula during the Golden Week, i.e. Oct 1-7 this year, although drastic improvement are found in terms of total supplies and stock replenishment, shortage still exists.
Ko said the Spring Festival will be another prime time for milk powder demand. If the government removes the limit, grey good trading will be revitalized, hiking up scarcity of milk powder again. "Spring Festival is not the right time to lift the restriction," Ko said, without proposing a concrete timetable to do so.
"Only if the parallel trading is fully under control, and the supply chain for milk powder is good enough to afford tremendous demand from the public, especially the local parents, will the government consider removing the limit."
Talking about the effectiveness of the order, Ko said it relieves escalating tension between people on both sides of the Shenzhen River.
"Before the implementation of the order, rows between local citizens and incoming mainlanders occur from time to time in the bordering Northern district," Ko said, "Once we imposed the ban, the frequency of conflicts saw a downward trend instead."
Meanwhile, the rule has a stabilizing effect over the supplies of milk powders for the retailers. "From March to October this year, the total import of baby formula was flat compared to the same period of last year, whilst sales figure has not been severely affected,"
Nonetheless, ever since the regulation coming into force in March this year, an avalanche of critics ensued. For example, Francis Lui, professor of Economics at the University of Science and Technology of Hong Kong, said there was an overestimation to the actual shortage of baby formula, which differs in various districts . Instead, the government should crack down on retailers who stock up milk powder on purpose, in a bid to charge higher prices later.
Meanwhile, the business sector of the city suggested the government to establish a shopping area near the border of Hong Kong and Shenzhen for the convenience of purchasers from the Chinese mainland.
"Back then, shortage of milk powder was not limited to the bordering districts, but also extended to Kowloon and the Hong Kong Island. We had to do something to clamp down on the unauthorized exporters, one of the culprits of the chaos," Ko said. Dimin grey good trading also discouraged retailers to stock up goods intentionally, he added.
But he roundly rejected the idea of cross-border shopping zone.
"First of all, it should be the business sector to set it up, not the government, or we will turn into competitors of retailers,"
"Furthermore, what if that zone is riddled with parallel good traders again?"
He also rebutted those who accuse the penalty of the milk powder restriction law for being too harsh.
According to the Import and Export (General)(Amendment) Regulation 2013 ( with effect from 1 March 2013 ) - Quantity of Powdered Formula for Persons Departing from Hong Kong, "Offenders are liable on conviction to a fine ofHK$500,000and to imprisonment for2 years".
"People just focus on the maximum penalty. But so far, the convicted persons are only fined about hundreds to a thousand Hong Kong dollars," Ko noted.
A committee has been formed by the Food and Health Bureau headed by Ko, to review the supply of infant formula in an effort to stop shortages in July this year. Although this was once seen as a sign of removing the two-tin limit, Ko just said the panel will do its best to improve the supply chain of infant formula for the city.
