F&B industry needs govt intervention to stay afloat

It is no secret that eating is a favourite pastime of most Malaysians.

And with the food and beverage industry being listed as an essential service during the Movement Control Order (MCO) period, one would think all is well for the industry.

However, the truth is far from that with industry players saying sales have dropped by 80 per cent since the MCO came into effect on March 18 following the Covid-19 outbreak.

With the government now extending the MCO until April 14, stakeholders are worried they may not be able to pay their workers next month.

A loose alliance of over 200 independent F&B owners and operators is hoping the government will look into their plight as the livelihood of some 12,000 local employees is at stake.

Joshua Liew, a spokesman for the alliance which has yet to be named, said while some outlets can still make ends meet, the sales margin has decreased by an average of 80 per cent.

“Some of our outlets are in shopping malls and with utilities being turned off (lights and air-conditioning), people do not want to walk in to order takeaways.

“It is counter-productive for us. If we don’t open for business, we lose income but then we are not making much as food delivery companies still collect a 30 per cent fee per order from us.”

Liew, the co-founder of espressolab, hopes policymakers will be able to help industry players in two ways – payroll assistance and rental relief which are our major operating costs.

“While certain malls have offered rental exemption, it remains a grey area as we don’t know for sure if we qualify if our outlets remain open during the MCO period.

“Two-thirds of the 200 people in our alliance say they are not making money and have been forced to cease operations and those who choose to open are only making 20 per cent of their normal sales,” he added.

Revealing that workers in the sector earn between RM2,000 and RM3,000 – among the lowest wages in town – Liew said some have been retrenched to manage the cash flow pressure.

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He said the alliance, whose members include Tealive, Nandos, A&W, Marrybrown, Boat Noodle, Carl’s Jr. and Makcik Kafe, hopes the government can meet up to 50 per cent of salary costs for staff on an F&B operator’s payroll.

They also hope the government will introduce a moratorium on rent during the MCO period and a subsequent reduction on rent for six months upon the lifting of the MCO.

“The UK government has vowed to meet 80 per cent of the salary cost for the F&B industry and it is our hope that the Malaysian government can identify which F&B operators qualify for similar assistance and also provide aid to workers who have been retrenched.”

As for rental relief, Liew said the recommendation is for the government to provide landlords with absolute tax breaks or breaks proportionate to the relief given to tenants.

“A total of 12,000 Malaysian employees are affected and we stand to lose RM17 million in wages throughout the one-month MCO period,” he said.

“Most of us have committed to paying the salaries of our staff for this month. But we are concerned about their salaries for next month if the MCO is further extended.”

Liew said the 200 people in the alliance represent some 140 companies and their projected revenue loss for the next 30 days is RM100 million.

“We hope the government will look into our concerns and include the F&B sector in its comprehensive economic stimulus package which is to be revealed on Friday,” he added.

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