Baby formula is big business in China—last year's $15.4 billion in sales was four times that of the US. Bloomberg reports that the country's tainted milk scandals have left Chinese parents clamoring for foreign brands, with some unusual consequences. Demand from China has been so high that Hong Kong on March 1 slapped a two-can quota on travelers going to China to protect its formula supply. Now, formula smuggling is suddenly much bigger business than drug running.
Since the quota went into effect, 879 people have been arrested and nearly 20,000 pounds of powdered milk seized—more than 10 times the number of people caught by border guards with heroin last year. (Total such busts numbered just 420 for all types of drugs.) But with Chinese food safety a huge worry and a two-pound can of Danone formula selling for $33.57 in Shanghai, nearly twice what it goes for in Germany, don't expect smuggling to drop off any time soon. "All these scandals that have happened are never good for any industry," said a Nestle executive in China, "but when you talk about the health of your baby, it’s very hard to say to people: 'You are overreacting.'" (Read more China stories.)