Response by Senior Minister of State Low Yen Ling on motion for adjournment on “Saving our Local F&B Businesses”

1.    Mr Speaker, I thank Assoc Prof Jamus Lim for raising this topic. Food has always been close to the hearts of Singaporeans. It forms part of our social fabric. So keeping our F&B sector vibrant and thriving is key to our unique local food culture and our way of life. 

2.    It is therefore more than just about businesses. We have an important stake in supporting our local F&B enterprises, and we are dedicated to ensuring that they have every opportunity to thrive, to transform, especially amid rising challenges. The F&B industry has always been highly competitive and the pressure has intensified. 

3.    Today, consumers have more choices than ever. Consumers' preferences are changing rapidly. They have become more discerning, demand quality, convenience and even unique experiences. Digital platforms have also transformed how customers discover, order and enjoy food. Social media has hastened the speed and the pressure for eateries to constantly thrill with new dining concepts and offerings. This is true not only in Singapore, but in every major city in the world. 

4.    Furthermore, like their counterparts globally, Singapore's restaurants are contending with persistent inflation and rising costs, intense competition, changing post-pandemic dining habits, and the urgency to adapt to technology and automation. We are determined to ensure that our local F&B businesses can adapt successfully to all these changes.

5.    Our F&B industry has long shown its dynamism and resilience, continually adapting and finding new ways to thrive. Despite thin margins and operating challenges, new businesses continue to enter the market even as others exit. For example, between 2015 and 2025, the number of F&B entities grew by a net of 42%, with more businesses opening than closing in most years. 

6.    Let me assure the Member that more than 90% of the registered F&B entities in Singapore continue to be Singapore-owned. This reflects the strong presence of local businesses in our Singapore F&B landscape. 

7.    We are heartened that many of our F&B businesses are pursuing transformation with determination. They are redesigning their operations, embracing technology, centralising food preparation – and it does not mean the taste is being compromised – adopting AI, improving productivity to serve their customers better. And we, not only in the Ministry of Energy, Trade and Industry (METI), Enterprise Singapore, but whole-of-Government, are supporting these efforts with practical assistance to helping our businesses and local F&B companies to raise productivity, stay competitive and build resilience. 

8.    Against this backdrop, the Member earlier raised concerns about rentals and manpower that the sector is grappling with. He has suggested measures such as limiting rental increase. 

9.    We understand the concerns behind the suggestions. However, imposing rental controls is not straightforward and could have far-reaching consequences. Allow me to explain very quickly. 

10. First, commercial properties operate under different market conditions. Businesses also vary widely in their operating models, locations and customer profiles. Imposing rental caps would require the Government to intervene directly in private commercial lease negotiations. This could distort market pricing and prevent rents from reflecting actual demand and supply conditions. 

11. Rental controls could also discourage landlords from making space available for F&B businesses. So then, over time, landlords may choose to put their premises to other uses. And over time, it could well mean that it reduces the supply of F&B space and creating further market distortions. 

12. In addition, rent control weakens the incentive for landlords to maintain their properties, potentially leading to poorer building conditions. 

13. Furthermore, during our regular engagements with the F&B businesses, several of them have told me that they value greater certainty over occupancy costs and lease arrangements that allow them to plan for the longer term. 

14. With all these factors in mind, the Government has focused our efforts on improving the overall leasing environment and fostering fairer landlord-tenant relationships. For example, Housing and Development Board (HDB) allows their tenants to renew their leases every three years at market rents assessed by a valuer based on comparable properties, without having to go through a re-tender. This has provided greater rent stability for existing tenants. 

15. HDB does not seek to maximise rental revenue or maintain high rental benchmarks. In fact, tenders are not always awarded to the highest bidder. HDB adopts the Price-Quality Method (PQM). For example, for coffee shops, where 60% of the evaluation score is based on factors such as affordability, good track record and community-centric initiatives. 

16. And I want to assure the Member where the Government has direct oversight, other than HDB, JTC premises and hawker centres, we will continue to review the framework to keep the rent fair and competitive. 

17. In addition, the Member will remember the Government has also worked with the industry to develop the Fair Tenancy Industry Committee's (FTIC's) Code of Conduct for Leasing of Retail Premises in Singapore. And the 13 key leasing principles promote fair and balanced lease negotiations between tenants and landlords. 

18. In fact, since 2024, when the law came into effect, all qualifying retail lease agreements must comply with the Code. 

19. I want to assure the Member that we will continue to monitor the rental landscape closely and work with industry stakeholders to promote a fair and transparent leasing environment through the FTIC's Code of Conduct for Leasing of Retail Premises. 

20. Many F&B businesses have shared with us their manpower challenges. And we, together with the Trade Associations and Chambers, like Restaurant Association of Singapore (RAS), together with the business advisers in the 10 SME centres, together with Enterprise Singapore, we engage our local F&B establishments very regularly. 

21. And they understand that with a fast-ageing population, manpower will continue to be limited. So, we must find ways to get around this constraint. 

22. Some businesses have been able to adapt and find new ways to grow despite the constraints faced. For example, they have shown very good proof points, successful stories of redesigning job, leveraging technology to increase productivity, reduce their reliance on manpower, redesigning such that their older workers can have better jobs and better wages. And we have many success stories. I had shared that two months ago in this House. 

23. We want to assure the Member and the House that where there is a clear need, the Government does provide targeted manpower flexibilities. 

24. For example, the Ministry of Manpower (MOM) currently allows businesses to hire Work Permit holders from Non-Traditional Sources for selected roles on the Non-Traditional Sources Occupation List, such as Cooks, which the Member raised earlier. 

25. Mr Mark Lee is not in the House. I remember two years ago, both Mr Mark Lee and myself, we co-chaired the Alliance for Action (AfA) on Business Competitiveness, and we engaged the Trade Associations and Chambers widely, especially our F&B and the retail sectors. We heard this feedback from them. This is one of the key recommendations that was submitted to the Government. 

26. And, during the MOM Committee of Supply, this was announced. 

27. I am happy to share with the House. I think you would know that from September this year, that means last month, MOM have expanded this list to include four more F&B roles, including kitchen assistants and waiters. The Member mentioned cooks and waiters. So, all these now, our local F&B companies can now tap on the Non-Traditional Sources for five of these F&B roles. This certainly will help our local F&B address manpower needs in roles with low take-up by locals. 

28. Earlier, the Member has suggested introducing a higher DRC for F&B. This may not be sustainable because being a small country with finite land and resources, Singapore has infrastructure constraints. We have to continue to manage the size of our foreign workforce carefully. 

29. I think we all recall, as Prime Minister highlighted in the recent National Day Rally, Work Permit holders are the largest group of foreign pass holders. We cannot successfully compete by relying on ever more manpower, whether foreign or local. Really, our long-term competitiveness must come from creating better jobs, boosting higher productivity and gaining stronger business capabilities. 

30. We understand that rising business costs, such as rent and manpower are real concerns. The Government will continue to provide support where needed to help our businesses manage these immediate challenges. 

31. That is why, three months ago, we announced a second tranche of support measures of close to $300 million to provide relief to our SMEs facing immediate cost and cash flow pressures due to the impact of the Middle East crisis. 

32. Besides financial support, Enterprise Singapore has also rolled out targeted programmes that the Member has talked about. I am happy that he remembers that for the F&B sector, over the last 18 months, METI as well as Enterprise Singapore, we curated sector-specific programmes like F&B Process Automation Programme, FoodX, as well as more recently, the F&B AI and Digital Integration Programme, to support our F&B sector to raise productivity, redesign the workflow so that they can do more with less. 

33. Mr Speaker, our culinary heritage, distinct food culture and local F&B businesses that contribute to our F&B scene, form part of our Singapore Story. 

34. I want to assure the Member and the House, across the entire Government, it is not just only METI and Enterprise Singapore, but including other agencies, such as National Heritage Board, through the Organisation Transformation Grant, the National Arts Council, the Ministry of National Development, HDB and MOM and many others are working hand in hand with the Trade Associations and Chambers, with the F&B sector, to support our local F&B companies. 

35. From targeted programmes that I talked about to broad-based funding, from capability building to work redesign and more. We will spare no effort to continue finding ways to support and future-proof our local F&B businesses to adapt, to gain new capabilities and to compete successfully.