Don't blame daigou, blame brands? Formula firms urged to explore new retail channels in Australia amid shortage complaints
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Daigou shoppers in Australia are once again in the spotlight, thanks to an open letter addressed to supermarket chain Woolworths from a father in Sydney.
The supermarket's decision to raise the per-customer infant formula limit from two to eight tins was criticised, and in response, it justified this with "improving supply in the market", adding that it would continue to "carefully monitor" stock availability and readjust the limit if necessary.
Shifting responsibilities
Amid the dissatisfaction from Australian parents being directed at daigou shoppers and local supermarket chains, McDougall said manufacturers, especially the a2 Milk Company, had a responsibility to find solutions.
McDougall told NutraIngredients-Asia: "If you look at it from the Australian consumer's perspective, it's understandably frustrating and quite stressful, especially if you're a mum in a supermarket who can't find what she needs and sees a lot of Chinese buyers 'hoarding' infant formula.
"But at the end of the day, I don't think the responsibility lies with the retailer, since it doesn't make money selling these products. The responsibility lies with the manufacturer to either create more product to address shortages, or create alternative purchase paths.
"That way, daigou shoppers won't have to source their goods from retail outlets, and Australian parents can purchase what they need when they need it, and there wouldn't be any media attention whatsoever."
He added that brands should work with daigou shoppers more closely, and provide alternative sourcing channels, in order to support the export market by creating jobs and generating income, and enable consumers to purchase whatever they need.
Can diversification stop demonisation?
He then singled out a2 Milk, saying: "The interesting thing is that the only brand being snapped up at a rapid rate by the Chinese is a2 Milk. If you go to a Coles or Woolworths, there are many other infant formula brands that are readily available."
To improve the situation, he said, a2 Milk should make its stock available to DaigouSales.com, so the latter could help to distribute it among the shoppers. This would divert their attention away from the supermarkets, where Australian consumers normally shop.
"The daigou channel should be made independent from the retail channel, because if we can stop the Australian consumer from bumping into daigou purchasers, every constituent group would be happy.
"It's been like this for two years now — the story is recycled every four weeks. I think a2 benefits from keeping its stocks short and its prices high, because it recognises that having contention over its products is in some ways good for the brand's value.
"However, I think this is to the detriment of the Australian consumer. I'm all for going to a2 and asking for stock for our daigou platform, and the Australian consumer would be unaffected."
DaigouSales.com has contacted a2 Milk to explore a possible partnership, but has yet to receive an answer.
"I'm very interested in working with the a2 team as I think we can reach a solution, but they've not responded to us. I'd love to hear from them so we'd know their position but right now, I can only infer it from what the company is doing, and that's maintaining the status quo.
"I don't think that's fair to either Australian consumers, or daigou shoppers, who are demonised in this situation."
In response to NutraIngredients-Asia's queries, a2 Milk briefly touched on the issue of supply, but did not address DaigouSales.com's claims of contact.
APAC chief executive Peter Nathan said: "The a2 Milk Company reported 84% growth in infant formula for F18 and is scheduled to provide a market update at its AGM on November 20.
"a2 Milk will continue to build supply in an effort to ensure that all consumers have access to our rapidly growing brand. To ensure that Australian domestic suppliers have constant access to a2 Platinum Infant formula, we have in place a very effective on-line ordering facility that ensures delivery to parents within 24 to 48 hours if they are unable to purchase a2 Platinum infant formula at the retail level.
"Any discussions with potential commercial partners and (regarding our) production volumes are conducted in confidence, and is market-sensitive information."
