1 Small Size of Singapore Market
The market for food products in Singapore is small. This makes it hard for local manufacturers to expand and reap the benefits of economies of scale. It makes it harder to justify throwing money into research and development to come out with new products. A small domestic market makes it hard to test new food products on the endconsumers. Ultimately, it also makes it hard to expand and sell Singapore-made food products in the global markets.
8 Based on surveys of SMa Food and Beverage Industry Group
2 Cheaper Imports from Malaysia
2.1 The main obstacle facing our local FBT manufacturers are the massive inflows of cheap imports coming from Malaysia. This has a tremendous negative impact on their abilities to sell their products to consumers.
2.2 Almost all the F&B manufacturers SMa surveyed said that their costs of production in Singapore were higher than in countries such as Malaysia and China. These push up their selling prices.
2.3 Singapore manufacturers become uncompetitive because buyers (supermarkets) usually aim for the lowest prices possible when they source products for their shelves.
2.4 The problem is compounded because the food products coming out of our neighbouring countries do not have to go through the same stringent health and safety checks (HACCP requirements) as in Singapore. Our F&B manufacturers wonder whether the government can assist in this area where an uneven playing field has been in existence for such a long time.
3 Supermarkets ‘stifling’ manufacturers
3.1 Another one of the major obstacles facing manufacturers here is not their ultimate consumers, but their go-betweens, i.e. the supermarket chains handling and distributing their products to the end-consumers.
3.2 F&B manufacturers say that the big supermarkets are squeezing their profit margins very tightly. This is through their excessive listing fees, trade margins, rebates, merchandising allowances, etc....