KUCHING – The removal of price controls on chicken and eggs is likely to affect the operating costs that restaurant operators have to incur.
According to Sarawak Restaurant Association chairman Stanley Hu, his business is already facing price hikes and he is concerned that the latest removal of price controls over the two commodities could exacerbate the current inflationary situation.
“I feel that there should be other mechanisms in place to control the prices, instead of the price control measure being removed,” said Hu, also director of Lok Thian Restaurant.
Another restaurant operator, Goh Ah Seng, believed that the egg price increase would be marginal, but he was also fearful about a wider impact on business should the increment be drastic.
“Eggs are not a major cost component for our business, but it would be a headache if the increase in cost became significant. The reason being the volume of eggs consumed every day is just too big,” said the chef, who is the founder of Hoi Tin Lau Restaurant.
Moreover, he voiced his concern about the possibility of other businesses taking the opportunity to increase the prices of chicken and eggs unreasonably upon the implementation of the floating price mechanism.
“We’re not too concerned about the government’s consideration to float the prices of chicken and eggs, but there’s a fear that some businesses might raise the prices drastically once the floating price mechanism is implemented.”
Goh said as a business owner, it was normal practice for restaurants to absorb minor cost increases in raw materials, but adjustments on the menu would have to be made to offset the increments; otherwise, it would significantly hurt profits.
“In the restaurant business, we price our food items based on a certain profit margin, but if the increasing costs start to hurt our profits, we would have to adjust menu pricing.
“After all, we also need to pay the rent and our workers’ salaries.”
Goh said the restaurant business would do its best in not passing the cost increase on to consumers, but this would be unavoidable if businesses could no longer cope with more expensive raw materials.
Federal Agriculture and Food Security Minister Datuk Seri Mohamad Sabu had reportedly said the prices of chicken and eggs could be floated after June as an effort to solve food shortages. – Borneo Post Online, March 1, 2023
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