HUNDREDS of kilos of in-demand baby formula are being shipped out to China each week through a series of new pop-up shops scattered across the inner west.

The retailers offer customers “pack-and-send” deals allowing them to buy tins of the powdered product in bulk, have them packaged up in cardboard boxes and sent directly overseas.

Shops operating in the Ashfield, Burwood and Marrickville shopping precincts, sell to buying agents — known as daigou — who act on behalf of clients in China wanting to purchase quality infant formula.

In China, the formula, which retails in the pop-up shops here for up to $30 for a 900g tin, is then onsold for up to four times the original price.

Demand for the Australian infant formula skyrocketed after a melamine contamination scandal in China caused the deaths of six babies and made 300,000 sick in 2008. The poisoning resulted in a rush on baby formula stocked by local supermarkets, forcing Coles and Woolworths to place a maximum limit on the number of tins sold to each customer.

Woolworths is still limiting the number of cans to four tins per transaction.

But the daigou are buying up to 10 tins at a time at the small inner west shops while still avoiding rigorous export rules on dairy product packages. Shipments weighing more than 10kgs need a health certificate and must be sourced from registered exporters as well as meet tough Chinese import requirements.

For a fee, the daigou, take the formula orders through Chinese social media sites such as WeChat. Now the federal Department of Agriculture is investigating reports of illegal baby formula exports to China.

However, in a statement, the Department said it did not have the power to limit the purchase of infant formula in supermarkets or other outlets.

“These are commercial arrangements between retailers and the manufacturers of infant formula.” it said.

Exporting a prescribed dairy product without a permit can result in 12 months’ jail.

The Australian Competition and Consumer Commission and NSW Fair Trading both said they do not get involved in regulating the prices of goods and services and have no jurisdiction to intervene.

An ACCC spokesman said a decision on whether to export is one for the individual businesses.

On Wednesday, the Inner West Courier saw workers loading dozens of cartons of A2 brand formula through the front door of a shopfront in Ashfield.

Inside the Brown St premises of Cly Trading Pty Ltd were a long fold-up table; a large roll of protective bubble wrap; masking tape dispensers; piles of export shipping dockets and; stacks of flattened cardboard boxes waiting to be filled.

Cly Trading also ships out bulk packages of locally-made vitamins and cosmetics.

Employee Tony Yang said Australian and New Zealand-made formula was popular with Chinese customers.

“They come to us to buy it and we send it to China from them,” Mr Yang said.

“It’s much better quality here. They trust it is safe.”

There is no suggestion the owners of any of these businesses are acting illegally.