A baby formula buying frenzy at a Melbourne supermarket shows limits on purchases have done little to deter customers’ red-hot demand.

Footage taken in the Woolworths store in the city’s east on Sunday morning shows 50 people queueing to buy baby formula tins.

They patiently wait in a line stretching throughout the store holding boxes of the baby food.

A shop assistant told 9News similar scenes happen regularly on a Sunday about 8am.

Supermarkets and chemists have implemented buying restrictions on baby formula. (AAP)

While baby formula sold in Australia is high quality and safe, counterfeit infant food sold in some parts of China have caused deaths and illness. (9NEWS)

Following the video’s release, Woolworths announced it will drop its baby formula limit from eight tins per customer to two from next week.

"We can confirm from next week the baby formula limit will revert to two tins per transaction,” a spokesperson told 9News.

"We'll closely monitor our on-shelf availability and feedback from customers as we make this adjustment.”

The spokesperson said it would ensure customers are advised of the changes by in-store signage.

In August, the supermarket giant increased a rise in the limit after it said supplies had improved.

Insatiable demand for baby formula tins from China has caused mass buying in Australia. (Supplied)

The demand for baby formla is fuelled by the"daigou" trade in China, which is seeing thousands of formula tins being shipped overseas.

Brands including A2, Bellamy’s Organic and Karicare Aptamil are highly sought after.

Earlier this year, manufacturers increased capacity to meet the demand. Danone, which makes Aptamil, has doubled its production capacity at its New Zealand factory, with much of its formula destined for Australian supermarkets.

A2 has also doubled production of its premium formula, but that's not enough to meet supply.