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Price increases affecting milk powder for infants are outstripping inflation, Consumer Council said Tuesday.

Still, supply shortages continue to dog the city, with two popular brands of the formula reportedly completely out of stock.

The supply shortages and price increases are likely to be exacerbated further as the supply of Japanese-produced milk powder may become strained.

The watchdog body called on suppliers not to raise the prices to engage in profiteering in the wake of the Japanese disaster.

In all of 2010, the council received 71 complaints about the supply and prices of milk powder. But in the first two months of 2011, there were 51 complaints.

Since April 2009, the council has been surveying the prices of 33 items of baby milk powder in retail outlets in the city.

The result showed that the price increases of the 31 items ranged from 0.4 percent to 12 percent, with the prices of 24 items hiking faster than the inflation and the prices of five items rising by more than 10 percent.

Even the prices of the same brand of milk powder often differed greatly when sold at different outlets.

In one extreme case, the price difference was 43 percent, according to the survey.

The council noted that some shops sell milk powder in bulk to mainland "couriers" willing to pay up to HK$50 a tin on top of the retail price and then resell the milk powder on the mainland.

"We have asked the suppliers to devise a code of practice for observance by the retailers in order to protect the interest of Hong Kong consumers," the council's Chief Executive Connie Lau said.

"If the retailers fail to comply, the suppliers should stop supplying goods to those shops that are raising the prices to the detriment of the rights of local consumers," she added.

Ron Hui, the council's vice-chairman of the Publicity and Community Relation Committee, said, "We call on the suppliers and retailers not to raise prices and make money out of the disaster, knowing this is gross injustice and highly unscrupulous behavior."

China Daily

(HK Edition 03/16/2011 page1)