Kuala Lumpur: The Malaysia Singapore Coffee Shop Proprietors’ General Association (MSCSPGA) has voiced its concerns over the government’s recent economic policies.
The association, representing around 20,000 coffeeshop operators across Malaysia, urged the government to reconsider several newly introduced measures that they believe are threatening the survival of businesses in the sector, which employs nearly 500,000 workers.
“The recently enacted Control of Smoking Products for Public Health Act 2024 (Act 852), which takes effect on Oct 1 this year, imposes stringent regulations on the sale and display of tobacco products. However, we are concerned that there is insufficient clarity regarding the Act and businesses have been given less than a week to comply.
“Compliance costs are estimated to reach RM620 million in the first year, with additional costs expected in subsequent years. Earlier this year, the introduction of mandatory tobacco retail licence further strained coffeeshop operators financially, many of whom rely on cigarette sales for about 20 percent of their revenue.
“This new requirement could lead many businesses to stop selling cigarettes altogether, further affecting their revenues, especially as they are already dealing with inflation and rising food prices,” the association said.
At the same time, the association pointed out that the recent diesel price hike has caused transportation costs for raw ingredients to rise by 25 percent, while construction costs have increased by 30 percent.
“This price surge has forced 20 percent of our members to shut down operations due to negative cash flow. As such, we urged the government to stabilise fuel prices to prevent further closures and maintain business sustainability.
With reports stating that Selangor is considering a ban on foreign cooks similar to Penang’s policy, the MSCSPGA said they are concerned about this new requirement as foreign cooks have already complied with the necessary permit regulations.
“Implementing a ban would increase operational costs for small businesses. Additionally, the higher turnover rate of local cooks could disrupt business continuity, further complicating operations for local eateries,” the association said.
The association stressed that there is a need for a more inclusive and transparent policymaking process by calling for dialogue with SMEs and micro-SMEs to ensure regulations are fair and feasible.
They also urged Prime Minister Datuk Seri Anwar Ibrahim to review these policies and assess their impact on small businesses.
“With SMEs contributing 36 percent of Malaysia’s GDP and employing 65 percent of the workforce, we believe that continued restrictive policies could have far-reaching consequences for the broader economy and local communities.
“Large chain outlets and foreign franchises have more resources to comply with these regulations thus placing independent local coffeeshops at a significant disadvantage,” the association said.
The MSCSPGA also expressed hopes that the government will consider their plea to support the sustainability of local businesses and avoid an economic fallout that could disproportionately impact smaller enterprises.
