FOOD and beverage operators have banded together to appeal for payroll assistance and rental relief as business has fallen up to 80% due to the Covid-19 pandemic and movement-control order (MCO).

The Malaysian Insight learnt that several F&B business owners, who call themselves the Malaysian F&B Operators’ Alliance, representing 148 companies, held an online meeting with Finance Minister Tengku Zafrul Tengku Abdul Aziz recently to present two key requests.

The first is for payroll assistance and stimulus, whereby they suggested the government cover up to 50% of salary costs for F&B staff. 

They said, in comparison, the UK government has promised to cover up to 80% of salary costs.

The group also suggested that Putrajaya minimise the eligibility criteria to qualify for payroll assistance.

The second request is for rental relief and abatement, such as a moratorium on rent for F&B operators during any MCO period. When the MCO is lifted, a 50% reduction on rent for a further six months should also be given.

To achieve this, they suggest that landlords be given incentives such as absolute tax breaks, or breaks proportionate to the relief given to tenants.

The group, which comprises independent businesses, Malaysian SMEs, and corporates, said they are only allowed to do deliveries and takeaways during the MCO period but still have to pay full rental.

“Rental represents the bulk of fixed overheads, but is not something we can control, as opposed to reducing manpower, which we desperately wish to avoid as most of the workers in this industry live hand-to-mouth.

“Many tenants classified as non-essential are already receiving relief in the form of rent cessation, whereas F&B operators are generally not included as they are considered essential services and are assumed to be generating revenue during this period of interrupted economic activity,” the group said in a document addressed to Tengku Zafrul sighted by The Malaysian Insight.

In another document on data presented at the meeting, the group said rental forms 40% of fixed costs while employee wages are about 50%.

It also estimated RM105.4 million in revenue loss for 30 days during the MCO, based on responses from 139 companies as of March 25. 

Another set of responses from 268 companies as at March 27 showed about 20% of F&B companies can only sustain themselves for less than a month.

Some 54% have one to three months before hitting insolvency without any assistance, 20% can last between three to six months, and about 5% said they can last more than six months. 

The group also requested for food delivery services to reduce their commissions during the MCO period, as the platforms take between 25% to 30% of restaurants’ revenue.

They said the platforms should maintain existing commission rates for delivery riders to protect workers’ welfare.

Cumulatively, the group said they generate close to RM1.5 billion a year and employ more than 10,000 Malaysians.

“We are just the tip of the iceberg as there are many more operators in our sector that are unaccounted for.” – April 2, 2020.