Hong Kong corruption officers arrest 18 in baby formula scam

May 10, 2011, 8:27 GMT

Hong Kong - Eighteen people have been arrested in Hong Kong for running scams in which shop workers accepted bribes to help mainland Chinese traders stockpile baby formula, corruption watchdogs said Tuesday.

The scams have been fuelled by a growing demand in China for milk powder made overseas because of fears over the safety of locally produced milk following the 2008 scandal when six children died and 3,000 were made ill after drinking formula milk contaminated with the chemical melamine.

The toxic chemical increases the apparent protein content of milk, allowing it to be diluted for profit without detection.

Tins of imported infant formula are reportedly being sold in China for up to twice their Hong Kong retail price, resulting in a booming cross-border trade in which traders stock up on products on day trips to Hong Kong.

A statement from Hong Kong's Independent Commission Against Corruption (ICAC) said a number of operations had been conducted in recent weeks after shops imposed limits on the number of cans a person could buy when supplies began running low.

In the latest operation, which began Friday, 15 persons were arrested and 1,000 cans of formula milk were seized.

Those arrested included staff from a supermarket and drugstore chains, as well as so-called parallel goods traders who buy products in Hong Kong to sell for profit in China.

The ICAC allege the staff were given up to 30 Hong Kong dollars (3.8 US dollars) per can by the traders for information about stock availability and helping them buy in bulk.

All those arrested have been released on bail while investigations continue.

Rising inflation in China has fuelled the growth of parallel traders and shopping trips where mainland Chinese stock up on cheaper household essentials at Hong Kong supermarkets and shopping malls.

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