Coles move baby formula behind the counter to combat reselling

Kinderling News & Features

In a move that will have many exasperated parents crying “about bloody time” Coles are introducing a policy that moves sought-after brands of baby formula behind the counter and prioritises ‘genuine’ customers over resellers.

$100 profit per tin

This rule has been put in place in a number of stores to prevent bulk-buying and ensure product does not end up in a reseller’s warehouse, awaiting shipment to keen Chinese buyers.

This comes “after reports that some baby formula brands, worth between $25-$35 for a one kilogram tin, were being bought in bulk from Australian supermarkets and on-sold to China for a profit of $100 per tin,” the ABCreports.

Baby formula is one of a number of products that Chinese customers are willing to pay a premium for, creating a lucrative business opportunity for enterprising resellers known as daigou.

Efforts to deter reselling

High demand in China and years of bulk-buying by daigou – who have been clearing shelves of product - have prompted Coles to more closely control sale of formula.

A limit of two tins per customer will continue to apply (an improvement on per transaction limits that saw resellers toddling in and out of stores, buying the limited amount multiple times).

Listen to Kinderling Conversation:

Coles say that formula will be kept behind service desks (alongside cigarettes and razors) or tagged with Electronic Article Surveillance lids – in some stores.

“Coles is committed to ensuring that our customers with a genuine need for infant formula have access to this product,” a Coles representative said in a statement yesterday.

It’s not clear whether this will eventually be policy for all infant formula, as yet.

Formula fights

Unfortunately, many Australian parents have been unable to access the formula their babies need because determined resellers are purchasing the product as quickly as it appears on the shelves.

In-store stoushes between frustrated parents and resellers are becoming all too common, and social media is awash with images and footage of resellers wiping formula stock from local supermarkets.

A frustrating situation

Indeed, what started as a pocket-money opportunity for a handful of resellers had now turned into a serious operation, with warehouses full of formula destined for China being exposed, and sneaky systems being put in place to work around store purchase limits.

Local parents have been at their wits end, spending hours driving from store to store, trying to find food for their babies.

Of course, Chinese parents are upset too. They simply want safe food for their little ones, in the wake of the 2008 contaminated counterfeit formula crisis, when over 300 000 Chinese babies were poisoned by the milk they were drinking. 

It’s a fraught situation, but it’s looking like retailers are working harder to find ways to protect formula intended to feed Australian bubs.

This post originally appeared on Babyology.