Goodbye $12 'cai fan'? Here's the government's plan for cheaper food in coffee shops

With inflation and the rising cost of living, diners have been complaining about forking out more for 'cai fan' of late.

Some of the 'crazy' prices that made headlines? A packet that cost $12 in Jurong West and $11 at a coffee shop in Ang Mo Kio come to mind.

In a speech to Parliament on Thursday (March 2), Senior Minister of State for National Development Sim Ann shared the Government's plan to increase "budget meal" options at coffee shops.

Speaking during the PMO's Committee of Supply debate, Sim said that all older rental coffee shops due for renewal from May will need to provide four budget meals and two budget drinks, as a condition for the renewal of their three-year tenancy.

Budget meals at coffee shops are typically priced at between $3 and $3.50, and basic drinks cost around $1 to $1.15. 

They must also be full meal options and not side dishes or snacks, and must be from two or more different stalls.

Two of the budget meals must be rice-based, and at least one must be halal.

Coffee shops must also serve a minimum of two budget drinks – kopi-o (black coffee) and teh-o (black tea).

Under the current Price-Quality Method (PQM) adopted by HDB since 2018, those who bid for new rental coffee shops must provide budget meals at six stalls as well as a budget drink.

They are required to provide six budget food dishes that are priced between $3 and $3.50, according to HDB. 

This new measure means that budget meals will progressively be offered at all 374 rental coffeeshops by 2026, up from the current 72, Sim said.

HDB will also offer a five per cent rental discount off the market valuation-based renewal rents for one year.

"This will make the availability of cheaper food options in coffee shops more certain and pervasive," Sim said.

Jamus Lim: Concerns over privately-run coffee shops

But could this mean the end to double-digit 'cai fan' prices?

Earlier in the day (March 2), Workers' Party MP Jamus Lim (Sengkang GRC) said that privately-run hawker centres "throw up another reason" for more expensive hawker food.

Last June, a coffee shop in Yishun changed hands for $40 million, while a coffee shop in Tampines was bought over for a record $41.68 million in the same month.

Acknowledging that HDB's PQM of bidding for coffee shop spaces allows non-price factors - such as affordability of food - to "come into play", Prof Lim said: "In practice, however, it is not difficult to game the system.

"Stallholders may price just one 'loss leader' item competitively, thereby qualifying for a higher quality score. But the remainder of the items may be expensive."

Prof Lim said that his Party calls for the authorities to adapt rental pricing to demand conditions, adding that this will keep the cost of rent lower when a new coffee shop is launched.

Responding to Prof Lim's concerns, Sim said that factors – such as cost of ingredients and overheads – affect not just food prices at HDB coffee shops, but also privately-run coffee shops. 

"So even if we just focus primarily on rent, that alone might not guarantee "budget" meal prices," she said. 

Sim shared that she will be engaging with executives from privately-run eating house chains on the importance of ensuring affordable meal options. 

ALSO READ: $5 or $9? Man gets varying charges for same 'cai fan' order on different days

chingshijie@asiaone.com

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