Why eating out in Labuan has become costlier

Labuan: Breakfast, lunch and dinner have become costly in the duty-free-island here as prices of food and beverages have "hit the roof" adding extra burden to the budget of households.Official data showed that food prices jumped between 25 and 35 per cent in the past year, driven by surging rental of premises and prices of various raw materials.

The growth has, however, meant more returns for landlords, farmers and distributors of the food commodities, but not for the consumers in this duty-free island that is part of the Federal Territories.

Food is at the core of human basic needs and, therefore, plays a huge part in the economy, especially for Labuan, which is heavily dependent on imported items.

The free-duty-island has over the years grappled with unstable and overpriced goods and food prices despite the Government's efforts to provide subsidy for ferry fare to a tune of three years (the subsidy hailed this year after it failed to bring down the goods' prices).

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The booming oil and gas sector for over a decade before its slump beginning late last year was a factor for the lack of interest in the agriculture sector and thus establishing food processing factories had been neglected.

Data from the Ministry of Domestic Trade, Cooperative and Consumerism (KPDNKK) Labuan shows the price of white prawns or banana prawn has gone up to RM33.45 per kg compared to only RM26.99 in Putrajaya and RM27 in Kuala Lumpur, while garlic (China) is being sold at RM14.45 per kg compared to RM11 in Putrajaya and RM8.50 in Kuala Lumpur.

Demand for tomatoes (RM4.23 per kg), garlic and shallot (RM6.68 per kg) has peaked over the years because of its importance and necessity in daily cooking.

A survey revealed that the monthly rental of premises for food outlets here range from RM2,000 to RM8,000, depending on the size.

The RM12 million food court project with 50 kiosks at Jalan Tg Purun under the Ministry of Federal Territories and built under the 10th Malaysia Plan is near completion and expected to help lessen the burden of consumers patronising other costly eateries.

However, chicken super price has remained unchanged in the past years at RM9.85 per kg, while squid is down to RM18 per kg compared to RM26.99 in Putrajaya and RM23 in Kuala Lumpur.

The drop in some of the raw materials, however, did not translate to a reduction in the price of food at eateries.

The higher rental of premises and food prices has forced eateries to pass on the additional cost to their customers to protect their profit margin.

Contrary to claims by customers, KPDNKK Labuan Director Arun Fadzillah Hamdan said the food prices in Labuan were still reasonable and comparable to other towns across the country.

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"The situation in Labuan is different to other towns, as it is geographically reasonable.

The people here are not facing heavy traffic congestion and most of the eateries are near to their residence, as such it does not incur high cost of travel to the consumers," he said.

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