Restaurants seek tax relief as costs go up

PUBLISHED : Wednesday, 20 February, 2008, 12:00am
UPDATED : Wednesday, 20 February, 2008, 12:00am

The catering industry wants tax and licence fee cuts to offset costs which have increased by 20 per cent in the past year.

Federation of Restaurants and Related Trades chairman Ken Chan Wing-on said the economy may be booming but operating costs of restaurants had gone up drastically.

He said the prices of pork, beef, chicken and mutton had jumped by between 30 per cent and 50 per cent.

Federation vice-chairman Anthony Lock Kwok-on said the figures were based on a recent survey of 50 catering groups which ran about 400 restaurants, comparing their operating costs from 2006 with last year.

The wholesale price of a roast suckling pig from Thailand had doubled from about HK$100 in 2006. In 2005, they cost about HK$60 each.

'Mainland farmers now tend to raise their pigs for longer and sell them when they are older for a higher price,' he said.

Mr Chan added that the cost of flour had jumped by an average of 20 per cent, and workers in the industry had received pay rises of 3 per cent to 8 per cent this year. Menu prices would probably increase by 5 per cent to 10 per cent this year, he estimated.

Mr Chan urged the government to cut restaurant licence fees and provide rate and tax concessions to help lower operating costs.

A dining outlet of 100 to 150 square metres in an urban area pays an annual licence fee of HK$3,140.

Meanwhile, consumers were also warned to brace for higher rice prices next month following a poor harvest on the mainland and in Thailand.

Federation president Simon Wong Ka-wo said that although there had been reports that the central government and India had both set quotas on rice exports in face of shortages, supplies to Hong Kong had not been affected.

The deputy governor of Jiangxi province had also assured the federation that rice supply would remain normal despite being hit by the recent massive snowstorms.

'Hong Kong has about a month's rice stock and many restaurants are guaranteed stable prices and supplies through contracts, but when stocks run out next month, that is when we will face the real challenge of fluctuating prices,' Mr Wong said.

Menu gloom

The catering industry says it has been hit by high food costs

The percentage price increase in the price of vegetables last year compared with 2006: 15%

Source: Federation of Restaurants and Related Trades