Chinese shoppers are willing to pay high prices for baby formula.
Chinese shoppers are willing to pay high prices for baby formula.

Warehouses of baby formula uncovered

A baby formula warehouse loaded with pallets, shopping bags and trolleys of tins stripped from supermarket shelves to be sent to China has been uncovered.

The secret stash of "white gold" product Aptamil was found by a Seven News crew, tucked away in a Gold Coast industrial estate to fulfil orders from the booming Chinese market for formula.

"There are lots of companies that want to ship their parcels overseas, we just leave the formula here and it's going there," the factory manager told cameras.

It's believed there are a number of warehouses like it elsewhere across Australia.

Parents have been up in arms about the burgeoning grey market practice, which while legal, has seen "diagou" professional shoppers emptying Coles and Woolworths of stock.

A furious Brisbane mum last month photographed groups of up to eight people raiding the baby formula at her local supermarket.

Jessica Hook, 27, said the situation was "out of control" said she spent "a couple of hours" every week travelling to different supermarkets early in the morning to find Aptamil Gold, the brand of formula she needs for her eight-month-old daughter. She said she hadn't realised at first that babies are not supposed to switch brands.

"A lot of Woolies and Coles now will put a tin of each type in the locked-up cupboard where they sell cigarettes, to sell to desperate mums," she said.

Brands including a2, Bellamy's and Karicare Aptamil are highly sought after by daigou, some of whom make up to $100,000 a year from shipping supermarket products to China.

Coles and Woolworths have a four-tin limit, but there is nothing to stop shoppers returning again and again.

Chinese shoppers are willing to pay big bucks for the normally cheap Aussie products, which are marked up by as much as 1000%.

In June, Woolworths inked a deal to ship its home brand products to China, to feed the insatiable appetite of the nation's growing middle class.

The supermarket giant set up an online store at Kaola.com, one of China's largest e-commerce platforms, selling its products direct to Chinese consumers.

The prices are understood reflect both the cost of exporting to China, and the high demand for Australian products. Milk powders are being sold at similarly inflated prices on other eCommerce platforms.

"Chinese customers are willing to pay a lot in order to get high quality products," Kaola's chief executive Zhang Lei said. "They don't mind paying a high price for quality."

Just as Australia's reputation for "clean and green" dairy products sparked the "white gold" baby formula boom, middle-class Chinese consumers are now snapping up our cereals, pantry goods, skincare products and even washing up liquids, at a premium.

News Corp Australia


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