The bridge over troubled water

Published Thu, Jun 23, 2022 · 05:50 AM

FELDA CHAY

WHEN the Singapore government implemented the circuit breaker in 2020 at the start of the Covid-19 pandemic, the food and beverage (F&B) industry was thrown into disarray. While the industry recognised that it was a critical move to prevent the spread of the disease, it also meant that their business, and the livelihoods of those who depended on it, would be severely impacted.

This called for urgent adjustments in cost structures for all businesses and for the F&B industry, which involved areas such as manpower, food ingredients and rentals, recalls Andrew Kwan, president of the Restaurant Association of Singapore (RSA).

“Of the 3, food cost was the most flexible and would rise or fall proportionately to revenues; manpower costs had some flex and variability, but rentals proved to be rigid and immovable. It was a potential millstone which would weigh down even the most buoyant of businesses,” he points out. “While landlords and tenants ought to have shared a symbiotic relationship, it was not reflected in the lease agreements nor in practice.”

Over time, tensions arose between landlords and tenants, with the latter feeling that landlords were abusing their power during the pandemic, refusing to lower rents or pass down rental rebates and waivers at a time when business and revenues were down.

Thankfully, these issues were quickly dealt with between landlords and tenants, and the Fair Tenancy Industry Committee (FTIC) was formed in May last year to be the custodian of the Code of Conduct for Leasing of Retail Premises (CoC). The CoC aimed to make lease negotiations between landlords and retail tenants fairer and more balanced. It also set out a process for resolving disputes after lease agreements have been signed.

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The Singapore Business Federation (SBF) played a critical role facilitating this outcome, says Mr Kwan, who is also a member of the FTIC. The federation helped bring and keep the stakeholders together, facilitated the co-authorship of CoC by tenant and landlord representatives, and helped ensure the successful implementation of the CoC.

“With SBF’s facilitation, the landlords and tenants were able to tackle the challenges within the retail and F&B industry as a collective. SBF has helped rebuild trust and refresh what ought to be a symbiotic relationship between landlords and tenants. SBF’s neutrality allowed it to be the bridge over troubled water, to connect otherwise un-aligned parties and in so doing, allowing common grounds to be found.

“Clearly, this would not have been possible without the effective leadership of the management team at SBF. In this, the F&B industry and the wider tenants’ group owe much to these under-recognised individuals, who laboured quietly behind the scenes for an existential cause, when it really mattered. I wish to put on record our deepest gratitude and appreciation,” adds Mr Kwan.

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