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June 24, 2017

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Infant formula more expensive despite ANZTEC: CF

TAIPEI, Taiwan -- The Consumers' Foundation (CF) said yesterday that although customs duty for New Zealand-imported infant formula has been reduced to zero, there has actually been a price increase of the products in Taiwan.

Yesterday marked the one-year anniversary of the Economic Cooperation Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu (ANZTEC). The agreement was signed on July 10, 2012 and came into effect in December that year.

CF Chairman Mark Chang (張智剛) said that the Executive Yuan should look into the reasons why Taiwanese consumers have not benefited from the deal.

According to the CF, despite there being no customs duty, prices for infant formula have increased by 21 percent.

In its effort to stabilize infant formula prices, the government has not seen substantive results from strategies such as signing ANZTEC, Chang said, adding that the price increase is "bewildering."

Logically speaking, prices should decrease with a decrease in customs duties, Chang said, adding, however, that consumers have not benefited from the customs duty decrease, which seems only to benefit importers.

Although prices are set by the market, infant formula is a type of important household goods; therefore, the government should work on ensuring the interests of consumers, the chairman added.

Meanwhile, hypermarket chains Carrefour and A.mart said that the government has made efforts to stabilize prices, but that the efforts were not enough to counter the decrease in global output and the imbalance between supply and demand.

Carrefour Public Relations General Manager Margery Ho (何默真) said that climate change, the increase in natural disasters, the decrease in milk production and the decrease in exports have led to a rise in dairy prices.

Ho added that demand in China has also increased.

Government Response

Meanwhile, the Ministry of Economic Affairs said that ANZTEC has been effective in mitigating the effect of global price increases in infant formula.

Bureau of Foreign Trade Deputy Director General David Hsu (徐大衛) attributed the price increase to a supply and demand imbalance.

Australia, one of the world's major suppliers of the product, saw a substantial decrease in its output because of weather conditions, leading to a 50-percent price increase in infant formula ingredient prices, Hsu said.

The rapid expansion of the middle class in mainland China and India has also further contributed to a supply and demand imbalance, Hsu added.

The deputy director general said that without ANZTEC, the price increase would have been higher.

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