Some relief, but F&B operators still anxious

KUALA LUMPUR: The Malaysian F&B Operators Alliance, a coalition of nearly 600 food and beverage members, says the stimulus package unveiled by Tan Sri Muhyiddin Yassin offers some consolation but leaves a few question marks for the future of the industry.

According to the group, whose members include Nando’s, MyBurgerLab and A&W, most local F&B operators have seen revenue drop by over 80% during the movement control order (MCO) period.

Group spokesperson Joshua Liew said their biggest issue in the immediate future was how to meet next month’s rental.

He said a poll they did immediately after the announcement showed that despite the MCO, 74% of landlords had not offered any form of rent abatement or reduction.“The government is not addressing this with landlords, so private initiative has to be taken.

“When the MCO is over, we will need to speak to malls and other landlords to maybe give us rebates in the interim,” said the co-founder of espressolab.

Liew added, however, that the government’s policies to help small and medium enterprises (SMEs) secure loans should be applauded.

“A lot of us will be needing loans after the MCO and for microloans, the government has approved an interest rate of just 2%.

“So, large-scale restaurants might still suffer but for smaller players, this is a great lifeline,” he said.

While the Federal Government did not introduce specific measures for F&B businesses, the poll showed that 43% of restaurant owners agreed that the RM600 employee subsidy, which the government had pledged for three months, would be helpful.

“But there is some uncertainty among the coalition about how long it will take for the government to approve the subsidy requests as we need money quickly,” said Tony Lim, who runs the popular Boat Noodle chain of restaurants.

As many in the group are experiencing cash flow problems, policies like income tax deferment for SMEs and restructuring or rescheduling of the employer’s portion of the Employee Provident Fund will also be particularly useful.

“Our immediate problem is cash flow, so this does help us.

“But much depends on how long the MCO goes on and once it is lifted, whether people want to go out and eat or not.

“So, I think people (in the coalition) feel some relief but also some anxiety about the future,” Lim said.

Wong Yin-How, owner of Vintry and Proof, pointed out that the salary subsidy was vastly different from the model applied by Singapore in its approach to the F&B industry.

“It does seem that the F&B sector has been less targeted as compared to Singapore, where 50% of wages in the food service sector are covered by the government and for a longer period – nine months.

“That is one glaring point of difference,” said Wong.

On Thursday, the coalition submitted a memorandum to the government, asking for help to pay up to 50% of salary costs for employees on F&B operators’ payrolls, as well as rental relief during the MCO and the following six months.

Without any aid, the group claimed over 50% of restaurants would be insolvent in one to three months.

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