CEO of NTUC Foodfare, Perry Ong

NTUC Foodfare imposes more than $2k ancillary charges on top of $1.6k rental on hawkers

Last week (28 Aug), Makansutra food guru KF Seetoh published a write-up on his blog revealing the sorry state of affairs the whole Social Enterprise Hawker Centre (SEHC) initiative has turned into.

"They (social enterprises) operate the new hawker centres like a hardcore commercial Food Court management system. Hence, I am seeing some issues that raises some concerns," Mr Seetoh said.

"These hawkers in the new hawker centres pay in total (with a laundry list of extra services and charges), an average of $4000, more than what it cost the highest bidder in Maxwell Hawker Centre - arguably the most popular hawker centre in Singapore - where it hovers between two to three thousand dollars a month in total."

More than $2,000 of ancillary charges

In one of the contract agreements seen by Mr Seetoh, which was signed between social enterprise operator NTUC Foodfare and a hawker, it showed that NTUC Foodfare charges $1,608 per month for stall rental.

Even though this amount is only slightly more than the average successful bid of $1,514 per month for hawker stalls operated by NEA at hawker centres, NTUC Foodfare has piled on a whole bunch of ancillary charges on top of the $1,608 per month stall rentals:

  1. S&CC Charges - $350 per month
  2. Table Cleaning Service - $550 per month
  3. Dishwashing Service - $850 per month
  4. Rental of Cashless System - $150 per month
  5. Food Waste Recycling Management - $40 per month
  6. Concept and Marketing - $300 per month

The agreement also stated that these charges are "subjected to changes". As for the "Concept and Marketing" charges, the agreement stated, "To provide marketing support service such as social media publicity, events planning, partnerships."

It's not known how NTUC Foodfare's "Concept and Marketing" service is helping to draw crowds to the hawker stalls. Perhaps it ropes in those labour MPs to make cameo appearances at NTUC Foodfare's food courts to draw crowds?

And, a further yearly charge was also seen included in the agreement:

  • "To pay and participate in the use of common crockery/cutlery of the centre including yearly replacement and replenishment."

Plus, hawkers at NTUC Foodfare must buy gas from NTUC Foodfare's own supplier in one of the clauses:

  • "Successful applicants must procure gas from licensed supplier designated by NTUC Foodfare Co-operative Ltd."

So, in total, the hawkers under NTUC Foodfare must pay at least $2,240 on top of the $1,608 rental per month.

Controversial Dishwashing Service

From the ancillary charges imposed by NTUC Foodfare, it appears that the dishwashing service charges the most, at $850 per month.

When the idea of centralised dishwashing service for food courts and hawker centres was first mooted by then Labour MP Yeo Guat Kwang back in 2013, it invited controversy.

"Given the labour shortage and tighter foreign workers quota, outsourcing and automation is the way to go for jobs that locals do not want to do," then MP Yeo said.

But Yuhua Hawkers' Association chairman Karney Ngai countered that the service should be an opt-in one, as it does not lower hawkers' expenses. Ms Ngai told the media, "For those who wash the dishes themselves, it can be difficult to persuade them to pay for something that they are now doing themselves for free."

"And while most hawkers will not raise their prices, some who cannot absorb the higher costs might," she added.

NTUC Foodfare CEO was headhunted

On the website of NTUC Foodfare, it said that it was set up "with the primary purpose to serve working people and their families by stabilising cooked food prices and helping them improve their quality of life."

It said it will provide "value, quality cooked food" in Singapore by "providing a pricing benchmark" for the industry to follow.

"Goodness Is Our Strength, Our Essence. Our aspirations as a best-in-class leader in delivering our social mission embodies our co-operative’s unique care philosophy as a social enterprise, and our desire to make a difference in the communities we serve," it said. "We care about creating a better and more meaningful life for all."

The CEO of NTUC Foodfare is Perry Ong. According to his online biodata, he was headhunted by NTUC to head its "cooked food business".

"At the age of 35, he became one of the youngest CEOs in NTUC social enterprises' history," the online information said.

Within a year upon joining NTUC, he led the Co-operative to be awarded the Top 100 SMEs Award 2008, in recognition of its achievement as one of the best performing companies in Singapore, Malaysia, Thailand and Indonesia.

Hungry for profits, in 2010, he orchestrated a 100% acquisition of Wang Café, "a leading coffee & toast chain in Singapore and subsequently grew the business and profits by more than 300% within 3 years".

And he led NTUC to be the "first, and to-date the only co-operative in Singapore to be awarded the most prestigious social enterprise award – The President’s Challenge Award – Social Enterprise of the Year (Commendation) in 2013".

Additionally, he developed and implemented a set of retail branding strategy that helped Foodfare to "win the Top Brand Award (Foodcourt category) in 2014, 2015 and again in 2016 at the prestigious Influential Brands Awards".

Indeed, new NTUC Chief Ng Chee Meng must be very proud of Perry Ong, for making good profits for NTUC Foodfare.