Hong Kong consumers will have to pay more or stop buying imported goods such as medicine, food and electronics after the government tightened quarantine rules for all incoming aircrew amid Omicron outbreaks.
Importers said the price of computers, frozen and canned food, and flowers had already increased by 10% to 40% since the government required all incoming airline crews including for cargo planes to be quarantined at designated hotels for a week from the start of this year. The increased logistic costs will ultimately be transferred to consumers.
On Wednesday, Hong Kong’s Chief Executive Carrie Lam warned that stricter quarantine requirements for aircrew would hurt Hong Kong’s air cargo services and result in some consequences, such as significant price surges and even shortages of some imported goods.
Lam expected Hong Kong would receive fewer cargo flights, which bring in fresh food, electronics and medicine. She also said the government would investigate whether the local Cathay Pacific airline had tried to bypass Hong Kong’s quarantine rules by allowing flight attendants to depart on passenger flights but return to the city on cargo flights.
Until recently, certain cargo flight staff were exempt from having to undergo quarantine upon arrival in Hong Kong.
Before the so-called fifth epidemic wave started in Hong Kong in late December 2021, aircrew were required to be isolated at home for three days only after arrival, compared with a 21-day quarantine for all other incoming travelers. The requirement was implemented by Cathay Pacific on November 17, 2021.
On December 27, 2021, a 44-year-old male Cathay Pacific flight attendant visited the Moon Palace restaurant at the Festival Walk mall in Kowloon Tong with his father after returning from the United States. He and his father later tested positive for the Omicron strain.
A 28-year-old female Cathay Pacific flight attendant arrived in Hong Kong from the United States on December 27 and also tested positive on January 1, 2022. When she was at home, she passed the Omicron virus to her mother, who later infected many others.
On January 3, a member of this cluster attended the birthday party of Witman Hung, the Principal Liaison Officer for the Hong Kong, Shenzhen Qianhai Authority, and infected at least one person.
This incident caused a huge controversy in Hong Kong as many local people complained they could not dine out, while the city’s senior officials and pro-Beijing politicians were throwing parties.
Some legislators blamed Cathay Pacific for allowing newly-arrived staff members to walk freely on the streets.
On December 29, the government said all incoming aircrews had to be quarantined at designated hotels for three days after arrival. Two days later, it increased the quarantine period to seven days.
A Cathay Pacific pilot told HK01.com in late December that dozens of experienced pilots had resigned after being required to be isolated at home after arrival in mid-November.
Cathay chairman Patrick Healy said the airline would fully cooperate with the government’s investigation into the alleged quarantine violations among the airline’s staff.
He said its recent practice of allowing crew who served on outbound passenger flights to return to Hong Kong on cargo flights was in line with government regulations and officials were aware of it.
“We have made fully transparent and accurate declarations for every crew member who was rostered on those flights to the relevant authorities,” Healy said.
Sunny Ho, an executive of The Hong Kong Shippers’ Council, said Hong Kong’s high-end restaurants would probably face a shortage of food. Ho said logistic costs for foreign electronic products, chips and high precision instruments could double, resulting in a 10% rise in prices.
Elsa Yuen, President of Hong Kong Logistics Association, said the supply of imported high-quality food was declining, while prices kept rising.
Yuen said it was likely the supply of fresh food, medical and electronics products would be hurt by the tightened quarantine rules. She hoped the situation would improve after the Chinese New Year holiday next month.
Richard Poon Kuen-fai, the managing director of On Kee Dry Seafood, said his company had imported 20-30% of its products such as frozen hemifusus, or sea snails, and canned abalone by air over the past year, given that global shipping services remained unstable.
Poon said if logistic costs continued to grow, the company would have no choice but to transfer the additional costs to consumers.
Gary Lau, chairman of the Hongkong Association of Freight Forwarding And Logistics Ltd, said due to the tightened quarantine rules for aircrew, logistic costs by air would increase by 30% to 40%. Lau said the situation would not improve in the short term as most incoming air flights had been full.
Over the past two years, mainland China has adopted a “zero local infections” strategy so its factories could stay open throughout the pandemic. However, after some Omicron cases were identified in the country last month, some ports and factories had been closed temporarily.
Analysts said any significant manufacturing or logistic shutdown in China caused by the pandemic would have a massive impact on global supply chains and the prices of many goods.
In recent weeks, virus outbreaks in Shaanxi and Henan province and Tianjin city have already triggered shutdowns to clothing factories and gas deliveries in Ningbo and disruptions at computer chip manufacturers in the locked-down city of Xi’an.
Follow Jeff Pao on Twitter at @jeffpao3