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CEO of NTUC Foodfare, Perry Ong

NTUC Foodfare on discontented hawkers: Nothing to stop them to operate in NEA hawker centres

Yesterday, Vulcanpost.com published an interview it had with NTUC Foodfare CEO Perry Ong ('NTUC Foodfare CEO Claims Social Enterprise Hawker Centres Remain An Affordable Option For Hawkers',13 Nov), regarding his response to the current brickbats social enterprises are receiving from the public.

Ong explained that social enterprise is not a charity. "Social enterprise is not about maximising profits, but it doesn’t mean that we don’t make a profit," he said.

"Ultimately, we need to make sure that the enterprise business is sustainable. But the profit that we actually make, we plough it all back into our social purpose and all the initiatives that we run."

"We actually have various initiatives to help hawkers support their needs," he added.

In some cases, however, social enterprises were found to have "outsourced" services to their own "related" companies, charging hawkers with highly controversial fees. For example, Koufu group running the new Jurong West Hawker Centre was found to have outsourced its cleaning service to GreatSolutions Pte Ltd, a subsidiary of GS Holdings. In turn, Koufu charges hawkers at $1,100 per month. Koufu is run by Pang Lim and GS Holdings by Pang Pok. Both are brothers and grassroots leaders.

No cannibalization

Ong also said that his NTUC Foodfare would ensure that hawkers in the centres it runs would not "cannibalize" each other.

"Sometimes, there’s a duplication of food types in hawker centres, which means that they are cannibalising each other. So for the new hawker centres we manage, we make sure that we curate the food types so there’s no duplication," he said.

"This also allows patrons to have more variety to choose from. Everybody serves a unique food type so hawkers can have a better chance of success (lesser competition). That’s our way of helping the hawkers when they come into the centres we manage."

In terms of stall rentals, Ong commented that NTUC Foodfare sets the stall rentals within the range of $1,600 to $2,200, the mid-range of the amount paid at the rest of NEA-operated hawker centres.

He said, "In our stall application exercise, the rent is fixed. Foodfare will not take more rent even if the hawkers want to pay more rent."

With regard to the ancillary charges, he said, "What happens is that we call for contract services, and the market responds [with their] prices. The only thing we do is we do not cheap source, we go for the best [value]."

"For cleaning contracts, we require cleaning companies to achieve a Clean Mark — that is the national standard, whereby companies need to make sure they pay a certain wage to their cleaners and send them for necessary up-skilling, amongst a list of other criteria. It is all part of the national effort under the Progressive Wage Model (PWM) to try and lift this industry, especially since the cleaning industry is the one that has a lot of cheap labour," he added.

"So if the cleaning company wants $x, then the hawkers pay $x. Foodfare does not impose additional layers of cost."

Concept and Marketing Fee

Then there is the "Concept and Marketing" fee, about $300 per month, which NTUC Foodfare imposed on its hawkers.

Ong explained that they run "a lot of" promotions. "We run a lot of promotions such as free parking during weekday lunch hours, organise events such as family workshops and flea markets, programming with the grassroots organisations and partners to drive traffic to the centre," he said.

"Ultimately, our whole idea is to provide affordable food to the public. In order for us to do that, we have to work very closely with our tenants and hawkers to moderate the food prices."

And for early termination of stall leases, Ong said that hawkers only need to give a one-month notice before leaving.

When asked about discontentment among some hawkers, Ong said, "There will always be groups of hawkers who are happy, and less happy. [For the latter group], we will engage them and find out their source of discontentment."

"But my hypothesis is that they are discontent because they are comparing two different areas: 1) their business is not doing as well as other hawkers so they find the going tough 2) they compare with other hawker centres that are non-social enterprise," he added.

"Here’s the thing: there’s nothing stopping these hawkers to operate in the NEA hawker centres. There are constantly vacant stalls so the privilege of choice is there, bearing in mind that we do not impose penalty for uncompleted tenure."