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Ko vows to probe claims of bundled selling of formula

Beatrice Siu

Wednesday, February 06, 2013

Dominant infant formula suppliers Mead Johnson and Friso have denied they have been bundling their products.

A senior government official, meanwhile, expressed deep concern about the bundled sales issue.

The denial came a day after Hong Kong General Chamber of Pharmacy chairman Lau Oi-kwok told a Legislative Council panel meeting on Monday that the two companies were bundling popular and unpopular baby formula when selling to small pharmacies.

But Lau yesterday said only Friso is involved in the bundling and that it has been happening for at least six months.

This was denied by Friso in a statement, adding that retailers have the right to choose which products they want.

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Lau insisted however that "Friso requires pharmacies to make purchases in a five-carton set for its baby formula number one to four."

From last week, when the government announced measures limiting exports to two cans per user, Lau added that Friso has replaced the plan with a nine-carton set costing HK$20,000.

But Lau said formula number two and four are the least popular and pharmacies worry they will be left with unsold stock on their shelves.

"So they prefer buying less or to stop buying from Friso, leading to the shortage of supply," he said.

He said pharmacies had been wrongly accused of hoarding baby formula or engaging in price manipulation.

Mead Johnson marketing director Regina Tam said: "We have not been involved in any bundling sales and have requested consumers to purchase certain designated models of milk powder so we will provide them the infant formula."

She added: "After the Lunar New Year normally there will be a quiet period, but we will make sure that our frontline staff will monitor the situation and our hotline service is operating through the New Year."

Secretary for Food and Health Ko Wing-man said he is "highly concerned" about bundling. His bureau is contacting distributors and retailers for a meeting to discuss matters.

"If [bundled sales] are happening, we urge the sector not to do so," Ko said, adding he has not heard about the sales during the meeting with suppliers.

People Power lawmaker Albert Chan Wai-yip estimated that about 80 percent of baby formula is exported from Hong Kong to the mainland.

"But given that Hong Kong babies only consume 500,000 to 600,000 cans of formula, it is quite sure that the shortage is not caused by internal consumption. Having around 15 million newborns in the mainland each year, Hong Kong suppliers can never meet their demand ... even though they continue to increase supply to the market."


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