Interview with 2GB Ross Greenwood - infant formula


11 NOVEMBER, 2015

High demand for infant formula


GREENWOOD:... that is Senator Richard Colbeck. He is the Minister for Tourism and International Education, the Tasmanian Senator, but also on top of that he is the Minister Assisting the Minister for Trade and Investment.

Now what he is saying right now is that he is going to go out and talk to a range of supermarkets and pharmacists and others to see where this crisis, in particular in infant formula, is coming from, but as we have told you, we know where it is coming from because we can see it on those Chinese websites like Taobao where it is being sold at many times the price that it would otherwise be sold for here in Australia. He's online right now, many thanks for your call Richard.

COLBECK: Thanks Ross.

GREENWOOD: You know about this, you grew up in Myrtleford in eastern Victoria, I come from Wangaratta, we know about the dairy farms, we know about how important it all is. They are getting their day in the sun but the fact of the matter is many Australian consumers are starting to get very worried about whether they are going to have the food to feed their own kids.

COLBECK: Yeah that's right and mum and dad were dairy farmers at Wilmot in Tassie too, so strong connections back to the dairy industry. You are right there is a real opportunity for that sector to benefit at the moment but there's obviously an issue in the market right now with people who are sending high quality safe food product back to China, which is a huge reinforcement of our reputation but for someone here who is wanting access to it it's a problem.

GREENWOOD: So how do we balance this out because let's think about this right now you've got a situation now where say, for example, there's nothing to stop an entrepreneur going out there and taking all of the infant formula out of a pharmacy or out of the supermarket, right, no problems, wrap it all up, send it to China, sell it in China through one of the websites. If they make a decent profit out of that they're a successful entrepreneur, they are pocketing some money. How does the government try and stop that given the fact that we do have this free trade agreement with China and ultimately if a person wants to pay full rate in Australia for those goods and then send them overseas surely that's just pure trade, that's commerce?

COLBECK: Well look in the pure sense you are right but there are some limitations around the trade into China so if an individual is sending package after package into China if an individual is sending package after package into China they're probably not complying with China's import laws because they have a ten kilo limit on what you can send in.

Two or three years ago there was an entrepreneur, as you describe him, in Melbourne who was buying bulk infant formula out of New Zealand and repacking it into two can lots in his garage and posting it off to China. That came to an end once they worked out what he was doing but you've got an issue here where obviously shelves are being stripped in the supermarkets.

The supermarkets do have limitations around how much you can buy and you're right I've had some good conversations with them today about some steps that they're taking and some suggestions that I thought they might like to take up, and they said if we halve the number of cans that we're allowing individuals to buy they'll just send in twice as many people. So they're working their way through how they manage this and we agreed that a mum who's looking for formula for their infant baby can't get the particularly brand they want this is a problem.

So after an interview I did this morning in Melbourne I thought well what's another way that we can fix this without the government having to intervene in the market but finding a solution, particularly for those people who are needing regular supplies and we're having those conversations now.

GREENWOOD: I understand what's happened this afternoon is that Woolworths has gone with the same policy as Coles and what they're going to do is limit the amount of formula that can be purchased in one transition from eight cans to four cans apparently. But there's a very good question about this because apparently a number of callers have rung up saying why don't the manufactures just sell more, because I notice that Coles is actually saying well actually if the manufactures, those dairy producers, were actually producing more of this stuff then why wouldn't they be upping the production to make certain there's not only enough for those who want to buy it and sell it to Asia but also those here in Australia.

COLBECK: look that is starting to happen through the industry and I'm aware of some plans particularly along the Murray and where you came from that were pretty close to being closed a couple of years ago and are now operating at capacity producing this product. There's been a few particular things that were occurring in China, I think Singles Day today which is perhaps sparked a bit of a spike and there are some other things were talking to Coles and Woollies about and other players about how we might manage this so that their regular customers can be ensured of a supply. I think that's an important thing for them, the acknowledge that they want to maintain the relationship they have with their regular customers and that's what they tell us they're focussed on, so we've had some conversations about how they might do that.

GREENWOOD: it's going to be interesting to watch. Senator Richard Colbeck is the Liberal Senator for Tasmania, also the Minister for Tourism and International Education, plus the Minister Assisting the Minister for Trade and Investment. Good to have you on the programme Richard, we really appreciate your time.

COLBECK: Thanks, Ross.

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