Thai food manufacturers and restaurateurs are being hit hard by inflation, they are forced to adapt to keep their business afloat.
Soaring energy bills and raw material prices are making it difficult for manufacturers and retailers to meet rising operational costs without adjusting their prices.
The Office of Trade Policy and Strategy recently reported that inflation rose 7.1% in May year-on-year, reaching its highest level in 14 years.
This rate accelerated from the 4.7% recorded in April.
Prices, especially for eggs and meat, have been climbing since January due to the pandemic, and soaring energy costs due to the Russia-Ukraine crisis have made matters worse.
For all households, soaring prices for basic commodities and household items mean they have to squeeze their budgets even further.
Prices for 289 goods and services rose, including electricity bills, cooking gas, vegetable oil, pork, chicken, vegetables, eggs and convenience foods.
The price of a 15 kg bottle of liquefied propane gas (LPG), for example, rose from 318 baht in April to 363 baht in June.
According to reports, the price will increase to 378 baht in July.
And the price of LPG is subsidized by the Oil Fuel Fund, otherwise it would reach 463 baht per 15 kg bottle.
Unbearable inflation
Food manufacturers and restaurateurs across the country have been affected by the consequences of rising food costs and the Russia-Ukraine crisis.
They asked the government to intervene.
Thai consumer products conglomerate Saha Group recently asked the government for permission to raise the price of its products, including “Mama” brand instant noodles, due to escalating production costs.
The group’s CEO said the prices of wheat and palm oil used in the production of instant noodles have skyrocketed due to the crisis.
The head of the group’s marketing team for Mama instant noodles said if the government maintains its current price controls, it will result in a shortage, as manufacturers are likely to reduce production capacity or even stop production due to losses.
But Commerce Minister Jurin Laksanawisit said the government insists on maintaining the current retail price of instant noodles and will maintain the price cap for as long as possible to ease the burden on consumers.
Increase in prices in restaurants
Restaurant owners who feel the effects of the crisis and cannot absorb the additional costs are already passing on part of the price increase to customers.
Jae Jong, one of Bangkok’s best-known restaurants for its fried pork, is one of them.
The restaurant announced the price increase to its customers on its Facebook wall.
The pinned post reads:
“We regret to inform you that the rising cost of food and ingredients has left us with no choice but to increase all items on our menu by 2 baht from June 1, 2022.
We apologize for this price increase and promise to review it when the situation improves.”
Be flexible to create goodwill among customers
Most food vendors try to hold on to the same prices.
In northern Chiang Rai province, one of the most famous snack vendors, “Roti Paa Yai”, tried to stick to the same prices for more than a year, but finally had to give in.
“Prices for cooking oil and butter have risen beyond what we could afford.
The price increase doesn’t even compensate for what we spend on ingredients, but it does help a little,” the owner said.
“Each piece of ‘special’ roti, such as chicken Mataba, now sells for 50 baht, an increase of 10 baht, while corn roti is now 30 baht and raisin roti 40 baht.
We keep regular Roti and Egg Roti at the same prices – 10 and 20 baht respectively – because we want to help people.
Some people come to the store with a 20 baht note in their hand and they can at least go home with an egg roti.”
Another measure used by Roti Paa Yai to control the price is to reduce packaging.
It has a sign informing customers that they only put roti in a box when it costs more than 30 baht.
So far all customers have understood and no one has complained.
In Bangkok, Matthew Jansupee, 36, owner of Chef Phu Kitchen, is managing soaring costs by offering an option of smaller portions of regular menu items for popular Thai single dishes at lower prices for delivery to boost restaurant sales and customer satisfaction.
Dishes are served in cups for only 29 baht.
The normal portion costs 59 baht.
“Inflation is real. It hits everyone’s budget.
We too have felt it.
People are earning less and reducing their expenses.
So we serve dishes that fit their budget,” he said.
Source: Thai PBS World
