Sat, Dec 17, 2011 - Page 2 News List

Retailers keen to have baby formula promotions: official

HEADACHE:An official said promotions were a problem because they are banned for formula for children under three to encourage breastfeeding

Staff Writer, with CNA

Most major retailers that sell imported baby formula are willing to go along with the government’s urging to cut prices, although they would prefer to do it as part of a promotion, an economics official said yesterday.

Lee Mei (李鎂), deputy director of the Ministry of Economic Affairs’ Department of Commerce, met yesterday with 10 baby formula retailers and importers hoping to persuade them to cut prices to reflect last month’s reduction in the import duty on the product from 5 percent to 2.5 percent.

The duty reduction will be in effect for a six-month period ending on May 24 next year.

“Most of the participants said the duty for baby formula accounts for less than 10 percent of the cost and the cut will last only for six months, so they would preferred to cut prices through promotions, such as ‘buy six cans and get one free,’” Lee said.

As for the size of the cuts, Lee said “every importer and retailer will have their own considerations.”

However, promotions might be problematic because of government guidelines on baby formula sales.

Lee said the Department of Health has banned promotional activities for baby formula for children under the age of three to encourage breastfeeding, though baby formula sold for children older than three would not be subject to such restrictions.

According to Lee, the government has made efforts to reduce baby formula prices after prices soared by about 50 percent over the last two years, mainly because of hikes to raw material and transportation costs.

Chinese Nationalist Party (KMT) Legislator Lee Ching-hua (李慶華) said in the legislature last month that a can of infant formula costs nearly NT$1,000 and poses too heavy a financial burden on young couples.

He said that with the nation’s birth rate one of the lowest in the world, the high cost of infant formula was one of the factors discouraging young couples from having children.

The Ministry of Finance later decided to halve import duties on baby formula and on two other kinds of prepared baby milk powder, which were reduced to 6 percent, down from 12 percent.

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