The Dutch government today ordered an investigation into persistent shortages of certain brands of baby formula, blamed on networks of traffickers who ship milk powder to China where it is sold at premium prices.
Deputy Economic Affairs Minister Sharon Dijksma ordered the Dutch Food and Consumer watchdog to probe a huge rise in demand for baby formula linked to so-called "baby milk runners", who bulk-buy powder in shops before sending it to China where it is resold to young parents fearful of local products.
"I want to gather information... Over the bulk buying and trade in the Netherlands in order to inform Chinese authorities that they are getting batches of milk powder that do not confirm to their regulations," Dijksma said in the statement.
There is growing concern in the Netherlands, one of Europe's leading diary exporters, about a looming national shortage of infant formula, with local papers quoting shoppers saying at least two popular brands were almost impossible to find on shop shelves.
"Dutch consumers can still find baby formula, but it's getting harder-and-harder," Dutch Food Industry Federation (FNLI) director Philip den Ouden told AFP.
The FNLI and food retail representatives met on Monday to discuss the growing concern over shortages, saying a measure to merely restrict the number of tins of formula per customer was not enough.
The FNLI and Dutch Food Retail Association (CBL) in a combined statement afterwards stressed however that despite concerns "the availability of infant formula in the Netherlands is not in danger."
"There is sufficient milk powder available, but not always the required brand," the Dutch Economic Affairs Ministry added.
Alarm bells over infant formula went off earlier this year when retailers saw a 50 percent year-on-year spike in sales figures from the last quarter of 2012, said Den Ouden.
"This was strange because the number of births in the Netherlands did not go up," he said.
An initial probe showed growing demand in China, largely driven by the memories of a 2008 scandal over Chinese formula tainted with the industrial chemical melamine, which left six children dead and affected more than 300,000 others.
Distrust was fortified last year when another Chinese manufacturer's formula was found to be contaminated with carcinogens, despite official pledges to clean up the industry.
Some Dutch citizens have now turned Chinese demand into a business opportunity and are making serious money in the process, Dutch newspapers reported this week.
Chinese websites charge hefty mark-ups, sometimes approaching 100 per cent, on the retail price.
Shipping fees can double those prices again, while customs checks and import duties in China can add another 30 percent, according to Chinese reports.
Major baby formula maker Nutricia last week Thursday published a full-page apology in at least three national papers for product shortages.
"I am aware that its hard to find our product in the shops at the moment," said Christophe Wadel, general manager at Nutricia, which makes Nutrilon baby formula.
"For this we are tendering our excuses," he added, saying "we, together with our trading partners are doing every thing possible to ensure that Nutrilon is available in the Netherlands."
The phenomenon has also hit elsewhere in Europe and Australia with sales being limited in Germany and Britain.
In Australia, a major run on Karicare reportedly linked to an influx of Chinese tourists over Christmas saw some supermarkets and pharmacies introduce rationing and purchase limits in January.
