A Melbourne mother who photographed shoppers clearing the shelves of infant formula in a suburban supermarket, despite purchase limits, has sparked a national debate over bulk buying by budding entrepreneurs targeting China.
Jessica Hays photographed shoppers in Woolworths Epping Plaza, Melbourne buying trolleys full of A2 Platinum Formula while another woman “guarded” the remaining few boxes left in the store.
“If they were with babies, it would be understandable, they need to feed their kids too. But it felt like a smooth operation, like they did this all the time,” she told Fairfax Media.
Woolworths is meant to have an eight can limit per transaction. There’s growing anger among frustrated Australian parents unable to buy formula because it’s sold out.
Another Facebook user posted this photo of the scene to the Woolworths Facebook page.
“We are in a formula shortage and you are allowing this,” she captioned the photo. “These people bought ALL of this A2 platinum formula….ALL OF IT!!!! What happened to 4 tins maximum per person?”
The photo has amassed 6,274 likes and 2,684 shares.
Australian supermarkets have recently enforced quantity limits on sales of baby formula, after people have started to bulk buy to resell them online to Chinese consumers.
Formula resold on sites such as taobao.com and eBay, is fetching three to four times the retail price.
A tin of Bellamy’s Organic can cost $84 in Shanghai. It retails for $25 in Australia.
It’s no longer for sale via the Woolworths online shopping portal.
There’s not doubt the baby formula market in China is being seen as a road paved with gold. Vitamin company Blackmores saw its shares soar even higher last month after announcing a partnership with dairy company Bega Cheese Ltd to develop infant formula. Bega shares also jumped 18% on the news.
Business Insider searched for formula listings on eBay.
The cans are being sold for well above the retail price and clearly target Chinese consumers.
“澳洲直邮中国 A2 白金系列 1段 奶粉6罐,” translates as “Australia direct mail China A2 Platinum Series 1 6 cans of milk powder”.
Some posts were being viewed as many as 16 times an hour.
In the lead up to the China-Australia free-trade agreement Australian businesses were positioning themselves take advantage of the new market.
In July Camperdown Dairy International secured a 15-year, $9 billion deal to supply powdered infant formula to China, despite still being in the process of buying grazing land and building factories.
The FTA is expected to triple Australia’s existing exports of infant formula to 15 million tins.
Demand in China for Australian infant formula and other health products has skyrocketed since 2008 when melamine contamination saw six babies die and 300,000 fall ill.
Since listing at $1 on the ASX in August 5, 2014 shares in Bellamy’s Australia have grown nearly 900% and currently sit at around $8.95. The company’s revenue has also grown 156% from the previous year.
This year new warehouses in Australia, Singapore, Hong Kong and China were contracted to service the growing market, where the company is focused on growing a multi-channel distribution strategy and continue to develop online and offline sales.