Travellers in Hong Kong this year faced unusual restrictions. Anyone caught leaving with more than two tins of infant formula risked two years in jail and a HK$500,000 ($65,000) fine.
The government acted after feverish demand in mainland China stripped shelves of imported baby milk powder and created shortages for the entrepôt’s population.
Rampant demand from mainland China had its roots in safety scandals surrounding domestically produced baby milk, starting with the melamine-spiked milk of 2008 that killed six babies and left 300,000 ill.
Now, consumers are alarmed that failures in the supply chain mean they may not know what they are eating and whether it is safe.
The length of supply chains means that measures authorities introduce in one place can affect consumers thousands of miles away and leave food manufacturers coping with a profusion of rules across different markets.
Chinese parents’ loss of confidence in local infant formula suppliers benefited foreign companies, such as Switzerland’s Nestlé and France’s Danone, which are regarded as more scrupulous than local brands.
But the companies were forced to lower prices by up to 20 per cent, after investigations into alleged anti-competitive behaviour, part of a Chinese government campaign to cut prices for domestic consumers.
In Europe, the horsemeat scandal that unfolded in January this year revealed a complex system of food movement and processes carried out across several countries, leaving the system open to abuse and ending with horsemeat being sold as beef in some frozen burgers and lasagnes in Ireland and the UK.
Regulators have struggled to keep up with the necessary controls – UK authorities had not tested for horsemeat since 2003.
“The current approach does not fully address such complexity,” commented the UK’s National Audit Office in its investigation into Europe’s biggest food scandal for three decades.
It has called for more tests and monitoring, saying that consumers expect effective controls or risk losing trust.
The greatest pressure on the food industry is to change practices by shortening supply chains. But that would increase costs which must be absorbed by food producers or passed to customers.
Pierre Mercier, a partner at Boston Consulting Group, says the horsemeat affair has “heightened awareness”.
Action taken includes tighter auditing of suppliers and stricter rules on outsourcing. “Contracts tend to be for a given volume a year, so if demand increases, the supplier may need to turn to an outsider to make up the difference. That can be risky,” says Mr Mercier. To avoid this, he adds, some companies have stipulated that outsourced companies must be subject to the same audits as their preferred supplier – or suppliers must be prohibited from using companies not on a preferred supplier list.