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Tag: eateries

  • Johor Eateries Resist Price Hikes Amid Surging Ingredient Costs, but Future Increase Likely

    Johor Eateries Resist Price Hikes Amid Surging Ingredient Costs, but Future Increase Likely

    Even as the cost of raw materials rises, food service operators in Johor, the southernmost state of Malaysia, have not yet increased their prices. However, if the Middle East conflict continues, these increases may become unavoidable.

    Adapting to Rising Costs

    Hussein Ibrahim, the Secretary of the Johor Indian Muslim Entrepreneurs Association, shared that member restaurants have maintained current prices despite a 20-30% increase in raw ingredient costs since March. “We can’t just raise our prices as Malaysians are cost-conscious, which could impact our business,” he stated.

    The association boasts 338 members, including around 200 Indian-Muslim food service operators throughout Johor, with the majority in Johor Bahru, a city on the Singapore border. To deal with increasing expenses, many operators are considering reducing portion sizes, according to Hussein. He also mentioned that unavoidable price increases might be on the horizon if the current crisis continues.

    Roland Lim, head of the Johor Bahru City Businessmen and Traders Association, reported a similar narrative, affirming that member restaurants have also kept their prices steady. He pointed out that downtown Johor Bahru restaurants have been hit hard by tighter security measures at the Johor-Singapore Causeway. These new procedures, established earlier this year, have caused Malaysians commuting to work in Singapore to skip their usual breakfast stops and go straight to immigration checkpoints. Reduced dining out by families, combined with ongoing infrastructure projects and subsequent traffic congestion, have further decreased restaurant patronage.

    The Impact of Rising Food Prices

    The ongoing conflict has resulted in increased food prices in Johor and other regions of Malaysia since February 28. By March’s end, vegetable prices in Johor Bahru had surged by 20-30%, attributed to higher transportation costs due to diesel price hikes and a prolonged heatwave.

    More recently, Economy Minister Akmal Nasrullah Mohd Nasir reported price increases for certain food items in the first week of May. For example, the price of Indian mackerel increased by 3.9% to RM17.42 (US$4.43) per kilogram; white prawns were up 1.2% to RM32.11 per kg; and fresh coconut milk rose 6.7% to RM16.88 per kg. Despite these increases, he reassured that food prices remain within a manageable range, with some items, such as beef, experiencing price reductions.

    Mohamad Sabu, the country’s Agriculture and Food Security Minister, warned that food prices could escalate in the upcoming three to six months due to increased production costs, such as fertilizer, animal feed, and fuel. “When these costs rise, market prices may also be affected,” he stated.

    Questions & Answers

    What are the potential consequences of the Middle East conflict on Malaysian food service operators?
    If the Middle East conflict continues, price hikes may become unavoidable due to rising costs of raw materials.

    How are food service operators in Johor dealing with the increasing costs?
    To cope with the rising costs, many operators are considering reducing portion sizes.

    How have recent price increases in various food items affected the overall food prices in Malaysia?
    Despite recent price increases in certain food items, the country’s Economy Minister reassured that food prices remain within a manageable range, with some items experiencing price reductions.

  • Singapore Eateries Appeal for Increased Subsidies and Rent Control Amid Skyrocketing Business Closures

    Singapore Eateries Appeal for Increased Subsidies and Rent Control Amid Skyrocketing Business Closures

    Amid numerous business closures, the restaurant industry in Singapore is urging the government for additional labor cost subsidies and measures to control excessive rental hikes for the food and beverage sector. This appeal was recently put forward by The Restaurant Association of Singapore, which suggested an increase in subsidies under the Progressive Wage Credit Scheme to 75% for 2026 to 2028, a notable rise from the current 50%.

    The Impact on Singapore’s Food Scene

    As patrons review menus outside a local restaurant in a Singaporean shopping center, the underlying struggles of the industry are far from view. The association has proposed numerous changes, including the elimination of foreign worker levies, reducing the wait time for Progressive Wage Credit Scheme payouts, and allocating additional funding to support employees’ parental leave.

    The restaurant industry in Singapore is weathering what the association refers to as a “perfect storm” of escalating costs, labor shortages, and evolving consumer habits. The situation has led the association to seek government intervention to enhance cost predictability and stimulate domestic demand in the food and beverage sector.

    According to government data, the food scene in Singapore suffered 2,431 closures within the first ten months of the previous year, with 63% of these businesses failing to make it past the five-year mark. With the sector’s contraction in 2024 and record-breaking business closures, the association warns of potential threats to the long-term sustainability of food and beverage businesses, especially small and medium-sized enterprises (SMEs).

    Addressing High Rental Costs

    Another key focus of the association’s proposal is rental stabilization. Maintaining a consistent rental cost is a significant issue for the industry, as it represents a major fixed expense for businesses. The association asserts that providing “essential cost predictability” would equip businesses with the necessary information to make informed, long-term financial decisions.

    The association has suggested policy interventions to address exorbitant rental renewal increases. These include introducing caps on increases or linking them to macroeconomic indicators such as gross domestic product growth.

    In an effort to further support local businesses, the association is advocating for stronger measures, including raising foreign worker quotas and simplifying licensing fees.

    Benjamin Boh, President of the association, stated, “A vibrant and thriving food and beverage industry is crucial to making Singapore an attractive place to live and visit for both residents and tourists.” He emphasized that the proposed measures would offer business owners and operators a much-needed “breathing room” to fortify their business structures while managing external market pressures.

    Since its establishment in 1980, the Restaurant Association of Singapore has represented over 500 members and roughly 800 brands, covering more than 5,000 outlets.

    Questions & Answers

    What is the Progressive Wage Credit Scheme?
    This is a government initiative in Singapore designed to subsidize labor costs in various sectors, including food and beverage.

    What policy interventions has the Restaurant Association of Singapore proposed to address high rental costs?
    The association has suggested measures such as introducing caps on rental increases or linking them to macroeconomic indicators like gross domestic product growth.

    What was the impact of business closures on Singapore’s food scene last year?
    The food scene in Singapore witnessed 2,431 closures within the first ten months of the previous year, with 63% of these businesses failing to survive beyond five years.