Bang for your buck no more?

The Star

a day ago

Malaysian Indian Restaurant Owners' Association (Primas) president J. Govindasamy
Price of popular fare to rise amid soaring operating costs
PETALING JAYA: Prices of banana leaf meals, tomyam and fried rice are likely to go up by month's end as eateries are buckling under rising operating costs.
Industry leaders say the combined impact of higher prices for ingredients, logistics, labour and new energy tariffs is pushing many establishments to the brink.
Some are saying that the hike in prices could be between 10sen and 50sen depending on the dish and the location of the eatery.
Malaysian Indian Restaurant Operators Association (Primas) president Datuk J. Govindasamy ( pic ) said many members have tried to maintain their prices in spite of escalating costs, but this is no longer possible.
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'Operators are facing sharp hikes in the cost of rice, cooking oil, spices and other essentials.
'We've tried to hold back, but with electricity bills also expected to go up this month, many simply can't sustain it any longer.'
Govindasamy noted that restaurants have been coope­ra­ting with the Dom-es­tic Trade and Cost of Living Ministry to maintain prices, but the latest wave of cost increases – particularly with the Sales and Service Tax (SST) now covering a wider range of goods – is proving too much to bear.
'While prepared food is not taxed under SST, many of our supplies now are.
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'That includes cleaning items like detergents and napkins, which are essential to daily operations,' he explained.
He added that ingredients, which were previously exempt from SST, are now subject to rates of 6% or even 8%, depending on the supplier.
'These costs add up quickly and are eating into already-thin margins,' he said, adding that many restaurants are closely monitoring the situation and may adjust prices from mid-July to early August as new supply orders are placed.
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He noted that SST is now also applied to rent and utilities, compounding the financial burden on operators.
Primas represents some 1,500 Indian restaurants across the country.
Govindasamy also suggested that the government consider reintroducing the Goods and Services Tax, which he said is a more structured system with input tax credits.
Tomyam restaurant owners are also saying they would meet this month to decide on raising prices, according to Pertubuhan Sahabat Tomyam Prihatin SeMalaysia adviser Che Mamad Che Mod.
'Prices of raw ingredients have already gone up by 10% to 20% since the start of the year – even before the expected increase in gas prices.
'Vegetables like kangkung and kailan are now selling for RM7 to RM9 per kg, compared to just RM2.50 and RM4.60 previously. It's difficult to find kangkung for under RM4 these days,' he added.
Although there are over 1,000 tomyam eateries across the country, most operators have so far resisted raising prices.
'Last year, we agreed to hold back any increase out of concern for the public. If we're struggling, others must be struggling more. We slashed our margins to support the government's efforts.'
But this year, Che Mamad said operational costs have climbed across the board – from ingredients to utilities to staff, which includes permit fees, insurance, EPF and Socso contributions for migrant workers.