Tins of baby formula stacked in the warehouse. Source: Supplied
Warren Landt with a can of formula. Picture: Stuart Walmsley Source: Herald Sun
A BACKYARD operation is sending up to 10,000 cans of baby formula each month to China from a suburban Melbourne home, netting $200,000 tax-free for its immigrant owners.
A milk industry insider who was outraged by the scam visited the home, in the southeast, and snapped photographs of the Aladdin's cave of baby formula.
"This is a threat to the Australian dairy industry," he said.
The makeshift warehouse was contributing to a shortage of baby formula in Australian supermarkets, he said.
The milk industry supplier said the company approached him to buy 10,000 tins of formula, which he did not provide.
But he said in talks with them about that proposed order, the internet-based company said it had 500,000 customers in China, paying $65 a can for Karicare baby formula - almost three times the retail price in Australia.
The company was making at least $20 profit from each tin it exported to China, the insider said.
The scammers have been purchasing dozens of boxes of the popular Karicare baby formula from a pharmacy distributor, according to labels on the empty boxes seen by the Herald Sun.
They take them out of the labelled boxes, put them in plain packaging and send them to China in batches of six, he said.
All infant formula sent to China must have health certificates and a declaration, according to the Australian Quarantine and Inspection Service.
But it appeared the company was not providing that paperwork, the insider said.
The makeshift warehouse in suburban Melbourne. Picture: Stuart Walmsley Source: Herald Sun
Warren Landt, export manager at Dandenong's OZDairy group, said the Australian Government needed to crack down on illegal exporting, just as New Zealand had.
"They have moved this from New Zealand because the government there did something about it," Mr Landt said.
A worker at the warehouse, who refused to give her name, denied they were selling baby formula.
The Herald Sun showed the worker photographs taken inside the shop. She said they were not taken there and refused to let our reporter inspect the shop.
A Department of Agriculture, Fisheries and Forestry spokesman said small exports were legal but exports of more than 10kg must meet China's requirements. Failure to meet standards can incur penalties of up to 12 months' jail.
stephen.drill@news.com.au
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