J. D. Heyes
July 11, 2013
China might be in the middle of an incredible economic rebirth, as its thousands of factories churn out all sorts of consumer goods for an increasingly hungry global consumer market. But it is doing so in a manner that is harming its public and destroying its environment. So bad is the contamination that now, even Chinese parents are avoiding Chinese-made products for their babies. In fact, the widespread avoidance could even be responsible for price-gouging Chinese parents.
According to Reuters, even common baby items like chew toys – such as teething toy Sophie the Giraffe – can cost as much as 30 bucks in Beijing and elsewhere around the country.
Such prices are “not a shock for Chinese parents, who have long lived with imported baby products that are sharply more expensive than elsewhere in the world,” Reuters said, but such dramatic increases have led Chinese authorities to open “an investigation into possible price-fixing and anti-competitive practices at five foreign companies manufacturing infant formula milk, including Nestle SA, Abbott Laboratories, Mead Johnson Nutrition Co, Danone’s Dumex brand and Wyeth Nutrition.”
Chinese parents don’t trust Chinese baby products
Other products specifically for babies appear to be higher in price in China than would seem normal. And while experts say that import duties account for some of the increase, the more prominent reason is because – following a spate of scandals involving Chinese products for both adults and children - Chinese parents simply don’t want to take the risk of buying contaminated domestic infant products. Foreign companies may be aware of this quandary and could be taking advantage.
“Brands have been able to get away with this just because of the fear factor about buying unsafe products,” Benjamin Cavender, principal analyst at China Market Research Group, told the news service. “If you look at how consumers spend their money, they are disproportionately willing to spend money on anything that their child will be eating or what will be touching their child’s body.”
Just a few short years ago, in 2008, six infants in China died and hundreds of thousands more fell ill after drinking melamine-tainted milk. And in 2011, Chinese police seized 26 tons of melamine-tainted milk powder destined for use in ice cream.
In recent months there have been several other food scandals as well – rat meat discovered in mutton; toxins in rice; too many hormones in chicken meat.”
But when it comes to children, the fear of domestic goods goes beyond food to items like toys and diapers,” Reuters reported. “Many local toys have been found to have toxic levels of substances like lead, arsenic and mercury.”
And in China, parents are limited to only one child in most cases, which makes them doubly cautious. So, when many Chinese and expats living in China go to Hong Kong or overseas for vacations and holidays, they buy diapers, infant formula, toys – you name it – in bulk.
The Chinese dragon is contaminated
But the demand is forcing outside retailers to take measures as well. Per Reuters:
In March, Hong Kong passed a law that classified milk powder as a restricted export, alongside items like rough diamonds, mandating that anyone without a license caught exporting more than 1.8 kg, about two cans of milk powder, will be fined or jailed. Security guards patrol shops at Hong Kong’s international airport to make sure the rule is not broken.
In Britain, shops are rationing sales of baby milk after Chinese visitors and bulk buyers cleared their shelves to send the goods to China. Boxes of baby milk costing around 10 pounds ($15) in Britain are on sale on Chinese websites for up to three times as much.
China’s economy is growing at about 7.5 percent – a rate triple that of the U.S. – and that growth has been sustained for many years. But the growth – and China’s lack of regulatory control over, say, the ingredients that go into many of its food products – have made many Chinese gun shy over domestically produced products. With little oversight and no enforcement of basic safety standards, don’t expect the Chinese food dragon to leave quarantine anytime soon.
This article was posted: Thursday, July 11, 2013 at 5:21 am