Study on Whether Food Price Increases Are In Line with Inflation
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the rising prices of food at hawker centres, coffee shops, and food courts, with Mr Yip Hon Weng and Ms Jessica Tan Soon Neo asking about the alignment of these increases with inflation and measures against profiteering. Minister for Trade and Industry Gan Kim Yong explained that price hikes in 2022 and 2023 were driven by global supply chain disruptions and higher import costs, though hawker food inflation has since moderated to 3.7%. To assist households, the Government enhanced the Assurance Package by $1.9 billion, providing $600 in Community Development Council Vouchers and a Cost-of-Living Special Payment. Policy initiatives such as the BudgetMealGoWhere website and the Price Kaki app were highlighted as tools for consumers to find affordable food and compare prices. Furthermore, the Committee Against Profiteering has resolved 16 cases of GST misrepresentation in the food sector since 2022 to prevent businesses from using tax increases as an excuse for unjustified hikes.
Transcript
90 Mr Yip Hon Weng asked the Deputy Prime Minister and Minister for Trade and Industry (a) in view of the recent findings by the Singapore Department of Statistics that hawker food prices have risen, how does the Ministry ensure that increases in prices at hawker centres, food courts and coffee shop food and drink stalls are due to increasing overhead costs and are not, in fact, excessively contributing to profits by such food businesses; and (b) since 2022, how many such stalls and food establishments have been held accountable for profiteering.
91 Ms Jessica Tan Soon Neo asked the Deputy Prime Minister and Minister for Trade and Industry (a) whether recent findings by the Singapore Department of Statistics that hawker food prices have risen include the price of food and beverages sold at neighbourhood coffee shops and food courts; and (b) whether the increases in price of food and beverages align with the rate of inflation.
Mr Gan Kim Yong: A recent article by the Department of Statistics on hawker food price trends covers food and beverages sold at food courts, coffee shops and hawker centres.
The 5.7% and 6.1% increases in hawker food prices in 2022 and 2023 respectively were primarily driven by more costly imported food ingredients due to supply chain disruptions triggered by the COVID-19 pandemic and the Russia-Ukraine war. In particular, Singapore’s import prices for food commodities rose by 8.7% in 2022 and a further 2.1% year-on-year in the first half of 2023.
Singapore’s import prices for food commodities have started to decline since the third quarter of 2023 due to the fall in global food commodity prices. Hawker food inflation has moderated to 3.7% in May 2024, which is broadly in line with Consumer Price Index (CPI)-All Items inflation of 3.1% in May.
The Government shares the concern of many Singaporeans regarding higher daily expenses. To address this, the Government introduced measures, such as the $1.9 billion enhancement to the Assurance Package in Budget 2024. The enhancement includes an additional $600 worth of Community Development Council (CDC) Vouchers for all Singaporean households that can be used at participating hawkers, heartland merchants and supermarkets. The first $300 tranche was launched on 25 June, and the second tranche of $300 will be disbursed in January 2025. Singaporeans will receive further support throughout this year, including the Cost-of-Living Special Payment in September 2024.
The Government has also rolled out various initiatives to provide consumers with affordable food options. For example, the Housing and Development Board worked with coffee shop operators to provide budget meal and drink options. Members of the public can search for these options using the BudgetMealGoWhere website. The Consumers Association of Singapore has also developed the Price Kaki app, which enables consumers to easily compare the prices of hawker food items and groceries from different sellers.
Given the Goods and Services (GST) rate increase in 2023 and 2024, the Committee Against Profiteering (CAP) was reconvened to review and investigate feedback about unjustified price increases of essential products and services that use the GST increase as an excuse. Since 2022, CAP has investigated and resolved 16 submissions alleging GST misrepresentation by hawker centres, food courts and coffee shops. Since March 2024, CAP has not received any such feedback.