From hawkers to restaurants, level of govt help is unpalatable

Throughout the various lockdowns measures implemented to stem the spread of Covid-19 so far, the food industry was never ordered to shut albeit having to contend with a takeaway only rule.

In April last year, Prime Minister Muhyiddin Yassin’s Prihatin stimulus package had taken into account the woes faced by those in the food industry and invoked the fictitious “Pak Salleh the mi kolok seller” story to demonstrate what sort of benefits were available.

The Prihatin package was supposed to allow eatery operators such as Pak Salleh access to a wage subsidy scheme and a RM50,000 micro-credit loan from Bank Simpanan Nasional.

Several small eatery operators told Malaysiakini that in reality, things were not as simple since most petty traders do not have proper book keeping or documentation to qualify for any assistance.

Ayob Abd Majid, 60, currently runs a Thai food stall from his home in Ampang, Selangor. He used to run a Thai restaurant in Kampung Baru, Kuala Lumpur up until May last year because he could not keep up with the RM8,000 rent.

During the “total lockdown” period, he makes about RM100 on a good day. The only government benefit he had access to was a RM15,000 loan at the start of a pandemic. Now, he is struggling with the RM300 repayment.

“For hawkers like us, securing loans from banks is never easy. You need to submit all sorts of documents. You need to have savings. You need to prove you have assets.

“The biggest problem is the credit data used by reporting companies such as CTOS. Some of us cannot secure loans because they have bad credit card records when they were younger which is affecting them now.

“Others have unpaid credit card bills because the pandemic has affected the cash flow of their business,” he explained.

This vicious debt cycle among petty traders was difficult to break out of, said Ayob who believed that it should be top priority for the government or else many businesses will never get off the ground again when the economy reopens.

Handouts sought

In the Chow Kit area of downtown Kuala Lumpur, there are 3,000 food hawkers that would normally serve the working crowd.

With strict lockdowns currently in place, patrons are rare, said Federal Territories Bumiputera Hawkers and Petty Traders Association (Jalan Raja Bot) head Shahrin Darus.

Shahrin proposed that the government provide a one-off cash handout of RM3,000 to the hawkers in the neighbourhood or else many businesses won’t survive lockdown.

Mohd Muizzuddin, 28, runs a food stall at the Jalan Bot market. He said that “total lockdown” had been a double whammy. Not only was his income dramatically slashed, his application for the Bantuan Prihatin Rakyat (BPN) welfare payment was turned down.

“Last year, I applied and secured RM1,600. This time, I can’t because I have no children,” he said.

“I am helping my parents run the food stall. Sometimes I can't even pay my own salary as I barely earn enough to cover the cost."

A coffee shop stall operator, who wished to be known only as Lim, told Malaysiakini that since his business was not registered with the Companies Commission, he has very little access to government benefits.

“My other family members who are properly registered, however, are entitled for these cash aids," she said.

“All I got this year was RM500 under the BPN scheme.”

The way lockdown rules affect businesses is not equal. Lim said that as she has good credit, she has been offered loans through unsolicited calls from the bank.

“Food hawkers who operate near commercial downtown and industrial areas are heavily hit. But for us, we operate near housing areas, our business is somewhat sustainable.”

Wind ups happening daily

Apart from small traders, bigger operators are also facing problems, primarily those serving commercial areas.

Malaysian Muslim Restaurant Owners’ Association (Presma) president Jawahar Ali Taib Khan said revenue has been greatly reduced because restaurants generally cater for a dine-in crowd.

“Some 500 out of 12,500 of our members have winded up since the pandemic started. It’s like closing down one shop everyday. They shut down because they cannot manage rent payments and failure to secure a loan,” he said.

Jawahar predicts that more members will fold by the end of the year, especially those serving prime areas where rent is a huge problem.

“One member is collecting only RM500 a day when his rent is RM1,000 a day,” he said.

Jawahar said people have a lot less disposable income now to order takeaway unlike the first movement control order (MCO) because the government did not impose a blanket bank loan moratorium.

“People are spending a lot less and trying to keep their takeaway bill below RM10,” he said.

Malaysia-Singapore Coffee Shop Proprietors’ General Association president Wong Teu Hoon said Malaysia’s ubiquitous coffee shops are also facing problems in prime areas because their model of business depends on collecting rent from stalls.

As stall operators struggle in prime areas with much less foot traffic, they are unable to pay rent and thus affecting coffee shop operators who in turn also have to pay rent.

“Nowadays, you see people buy takeaways. How often do you see people walking away with just a kopi peng (iced coffee)?” said Wong.

The bigger, the harder to adapt

For bigger businesses, lockdowns are harder to adapt to. Chinese banquet halls, often used for weddings and big gatherings, for instance are having trouble transitioning to the takeaway business.

Wong said despite having no business during lockdowns, bigger restaurants and banquet halls still have to contend with utilities, rental and wage bills.

Moreover, popular food delivery services charge up to 38 percent of the selling price in fees, said Wong, making the transition to digital difficult.

“Medium-sized eateries sometimes transition into home-cook or affordable food packages and they deliver it themselves. Bigger or higher-end restaurants will find that difficult,” he said.

However, some interviewees with bigger food businesses, better documentation systems and proper books, are more likely to be eligible for loans which helped them change their business model.

One such operator was Teo Wee Kee, whose family runs two restaurants in Batu Pahat, Johor. Teo said his company decided to deliver frozen food and cooked food during the lockdown.

This idea came about after discussions among company directors and supporters of his business who follow him on social media.

“We still estimate we need another three to five years to recover our losses,” he said. - Mkini