Minister Lim Hng Kiang’s Written Reply to Parliament Question on Growth of the Food and Beverage Sector in Singapore

​Question

Ms Tan Su Shan: To ask the Minister for Trade and Industry (a) over the last 10 years, how has the F&B sector in Singapore grown in terms of GDP contribution, number of outlets and employment in this sector; (b) whether there has been a significant increase in this sector which would account for the rapid rise in demand for foreign workers; and (c) whether there are plans to help those that will have to close down due to the labour cost pressures, to channel their entrepreneurial energy elsewhere.

Written Reply by Mr Lim Hng Kiang, Minister for Trade and Industry

The GDP contribution from the Food and Beverages (F&B) sector has remained at approximately 1.3%

[1]

from 2001 to 2011. Over the same period, the number of F&B establishments grew from 4,185 in 2001 to 6,453 in 2011, an increase of 54%.

[2]

  The total employment in this sector grew from around 91,000 to 175,000, with the proportion of foreign workers increasing from slightly below one in six in 2001 to around one in three currently.

[3]

 The growth in the number of foreign workers employed in the F&B sector was strongest from 2005 to 2008, when the economy outlook was favourable and F&B businesses expanded rapidly.

A vibrant F&B sector is important for Singapore to remain an attractive city in which to live, work and play. However, while the growth of this sector has created more jobs for Singaporeans, it has also led to a significant increase in the number of foreign workers. This is unsustainable. Under the productivity roadmap for the F&B sector, the Government has therefore set aside $75 million to help businesses improve productivity and reduce their need for foreign workers. One initiative under this roadmap is SPRING’s Part-Time Pool Programme, which will help F&B establishments tap on a pool of trained part-timers for deployment during peak service hours.

In addition, to encourage corporate restructuring, the Government provides an allowance of up to $5 million for all qualifying share acquisitions in the basis period for each Year of Assessment under the Mergers and Acquisitions (M&A) scheme. 

Businesses that cannot restructure and adapt to the new operating environment may eventually close down. Entrepreneurs who subsequently start up new ventures can tap on various government schemes, such as SPRING’s Start-up Enterprise Development Scheme

[4]

(SEEDS) programme and the Technology Enterprise Commercialisation Scheme

[5]

(TECS) to help grow their business ideas.

[1]

Source: Department of Statistics.

[2]

Source: Department of Statistics, Survey of Services. ‘Number of establishments’ refers to the estimated count of all active ACRA-registered establishments that engaged in F&B services.

[3]

Source: Ministry of Manpower.

[4]

SPRING SEEDS is an equity-based co-financing scheme for Singapore-based start-ups with innovative products and/or processes with intellectual content and strong growth potential across international markets.

[5]

TECS supports early-stage Proof-of-Concept (POC) and Proof-of-Value (POV) projects of up to $250k and $500k respectively.