“It is not illegal, but still wrong”

/ 08:18 PM/ Blog News/ 0 comments

Recently, a video clip about Chinese “daigous’ snapping up baby formula in Coles has gone viral in various online social media. The conducts of such daigous obviously infuriated local Aussies, who filmed what happened in the supermarket and uploaded to YouTube. In the video, the daigous were however unrepentant and one of them asked, “Is it illegal” when confronted by an Australian, who shot back “it is not illegal but is still wrong”.

Chinese daigous has been a common phenomenon in almost every part of the world in the past few years, and have aroused a lot of controversies in the western world. It owes its existence to China’s soaring economy, and with it, the purchasing power of its consumers, particularly the middle class, who is more confident in quality and safety of food products supplied by advanced western economies. The so-called “daigous” is in fact a Chinese term, meaning “buying for others”. Some of them may be overseas students, tourists or Chinese migrants. Most of them work part-time, but some also work full-time. The huge demands push up price in China’s domestic market, and create a broad price gap between the same products sold in the producing countries and China. As far as Australia is concerned, Australia’s milk products, especially baby milk powder, are what the Mainland Chinese are crazily after. Hence, we have what happened in the above video clip. The flourishing presence of Chinese daigous in the Australian consumer market is vividly testified by the recent back-door listing of a company known as AuMake International, which specialised in exporting Australian products to Mainland China. From its prospectus, it tells that one of its major sources of customers is the daigous, for whom the company provides one-stop services and a diversified product variety.

Local Aussies’ resentment of the prevalent Daigou activities is perfectly understandable, as they tend to put them out of instant reach of their daily necessities and may push my price up. But the problem here is that Australia’s current law contains no clear provision to prohibit daigou activities, and any ban or quotas imposed by large retailers like Coles are voluntary. The situation is like what happened in Hong Kong before 2013, but the Hong Kong Government was quick to impose an embargo which practically forbade carrying out of HK more than 1.8 kilograms of milk powder. In contrast, Australia’s current export law does not regulate the export of products below 10kg.

Hence, we had an arrogant daigou asking provocatively if it was against the law? Or is it really not? A provision in the Australian Consumer Law (section 21) (ACL) has flashed across my mind, which says a person must not, in trade or commerce, and in connection with supply or acquisition of goods and services, engage in unconscionable conduct. The term “unconscionable conduct” is given a broad meaning and the law expressly directs the court to consider all circumstances when determining whether a particular conduct is unconscionable. While the author is aware of no Australian cases which has held whether or not daigous’ conducts are unconscionable, it may be reasonably argued that their conducts are against commonly understood moral principles, as what they are snapping up and hoarding are not for satisfying their own personal needs, but for resale to overseas consumers at an obscene profit, while totally ignoring the legitimate needs of local Aussies. What is the difference between their behaviour and scalpers’? The only difference is that the former is for satisfying the demands overseas but the latter is usually not so, but then scalping is outlawed in Australia and there is no reason why daigou is not, or at least not subject to some sort of restrictions. However, despite all these arguments, it seems unlikely the Australian Competition and Consumer Council (ACCC) will take action against those individual and small daigous but in relation to those large, well-established ones, such as those having incorporated, set up dedicated websites, and hiring sub-daigous, it may well be worth a try to quietly gather evidence about their activities and file a complaint to ACCC to see what its attitude is.

Moreover, for the end consumers in Mainland China, they may not have the protection of the ACL when buying from small, individual daigous as the law has made it clear that ACL does not apply to private sellers. So, if there is any flaw with the products, they may not be able to sue or file a complaint in Australia. This will of course be different if they buy from some large retailers like AuMake mentioned above, where they will enjoy full protection of the ACL even though they are located outside Australia.



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