ISE07/20-21
| Subject: | food safety and environmental hygiene, food safety, market services, public markets |
- Public markets are covered venues providing fresh or cooked food and daily provisions to the public. In general, these markets are recognized for their convenience for local residents to purchase affordable produces, as well as opportunities for small-scale stallholders to earn a living.
- In Hong Kong, public markets1Legend symbol denoting In Hong Kong, some public markets - such as the Lockhart Road Market - contain both a wet market that sells fresh food and daily provisions, as well as a cooked food centre. The issues relating to the business environment of public markets have been studied by the Subcommittee on Issues Relating to Public Markets in the Sixth Legislative Council. were established in the early years to re-site on-street hawkers. Since then, these markets have evolved into a major source of food and daily provision for the general public. Yet, the majority of markets were built around four decades ago and beset with a number of hardware and management issues. In view of this, the Government has since 2017 begun to develop new markets, refurbish old ones, and explore the feasibility of management reform.
- Similar to the case of Hong Kong, public markets have been part of the social landscape in Singapore. They are positioned as hawker centres which sell a variety of cooked food, market produce (such as meat and vegetables), and piece and sundry goods.2Legend symbol denoting See National Environment Agency (2020a). The Singapore government has finished upgrading all existing hawker centres since 2013, and has announced plans to construct 20 new ones by 2027. In order to enhance the vibrancy of hawker centres, the city state has also implemented new management models, supported existing tenants to improve their operational efficiency, and provided incubation programmes to attract new entrants to the trade.
- This issue of Essentials begins with an overview on Hong Kong's efforts to modernize its public markets, covering the issues of concern such as number of vacant stalls and vacancy rates, trade mix of goods and market management. This is followed by a discussion of Singapore's measures to revitalize its hawker centres.
Modernization of public markets in Hong Kong
- As at October 2019, the Food and Environmental Hygiene Department ("FEHD") managed a total of 74 public markets, of which 35 were standalone wet markets and 39 contained both a wet market and cooked food centre.3Legend symbol denoting FEHD also manages 23 standalone cooked food markets. See Food and Health Bureau (2020b). The majority of public markets were commissioned before the 1990s to re-site on-street hawkers.4Legend symbol denoting See Food and Health Bureau (2018). Yet, the appeal of this older generation of markets has been diminishing due to outdated hardware, management issues, as well as competition from other market facilities in the territory5Legend symbol denoting For instance, the Housing Authority, Link REIT and other private developers also operate a number of market facilities in the territory..
- In order to improve the operating environment of public markets, the Government announced its plans in 2017 to develop new markets and refurbish existing ones. In particular, it has taken forward seven new market projects in underserved districts and New Development Areas,6Legend symbol denoting These include the development of new public markets in Tin Shui Wai, Tung Chung Town Centre, Tseung Kwan O, Kwu Tung North New Development Area, Tung Chung New Town Extension and Hung Shui Kiu New Development Area, as well as the establishment of a temporary market in Tin Shui Wai. See Food and Health Bureau (2020a). and earmarked HK$2 billion for the 10-year Market Modernisation Programme involving the refurbishment of selected markets.7Legend symbol denoting The Market Modernisation Programme involves various types of hardware improvement work such as re-design and re-zoning of stalls, drainage improvement, provision of air-conditioning, barrier free access, and lifts and escalators. In the first phase of the project, the Government plans to carry out major overhaul of four public markets as well as minor refurbishment of another 11 public markets across different districts in the territory. See Food and Health Bureau (2020a). As a means to enhance market vibrancy, the Government has also explored a number of reform measures related to their daily management, trade mix of goods and tenant policy.
- Notwithstanding the Government's range of measures, there remain a number of concerns over the future positioning and management of public markets in Hong Kong. The major issues consist of the following:
(a) utilization of vacant stalls: as at 31 December 2019, the total vacancy rate of public markets stood at around 13%.8Legend symbol denoting The figure includes a number of vacant stalls which are frozen to fulfil operational needs such as forthcoming improvement work. See Food and Health Bureau (2020b). At present, long-standing vacant stalls are put up for auction at concessionary upset prices.9Legend symbol denoting Under the arrangement, FEHD reduces the upset auction prices for stalls having been vacant for six months or more than eight months to 80% or 60% of the original upset prices respectively and lets out the stalls through a three-year tenancy agreement. Stalls which have been left vacant for eight months or more and are not leased out according to the above method will be put up for auction for a short-term tenancy of three months at the same upset prices. See Food and Health Bureau (2019). Furthermore, a number of vacant stalls are frozen by FEHD for operational needs, such as forthcoming improvement work. Notwithstanding this, there are suggestions that vacant stalls may be put to more productive use by letting them out on more flexible terms or converting them into community facilities; (b) trade mix of goods at public markets: a proper trade mix of goods offers varieties of food and daily provision to attract patrons near and far. According to FEHD's review,10Legend symbol denoting See Food and Health Bureau (2018). the majority of stalls in public markets (73%) offered fresh or cooked food options in 2018. But owing to historical reasons, about 21% of stalls in public markets sold non-food dry goods, such as clothes and footwear. The percentage, however, varied significantly from market to market. For one market in particular, almost half of all stalls sold non-food dry goods. The uneven trade mix has been identified as a cause for limited patronage and inactive operations. It has been suggested that a more diversified trade mix of goods can enhance market vibrancy;11Legend symbol denoting See Legislative Council Secretariat (2019). and (c) adoption of new management measures: at present, the Government is exploring the feasibility of management reform in new and refurbished public markets. The measures under consideration include (i) outsourcing the daily management of public markets; (ii) introducing a mechanism for tenancy renewal by accounting for the past performance of sitting tenants;12Legend symbol denoting At present, common malpractices by stallholders include obstruction of passageway, unauthorized change of use of stall, and inactive operation. Repeated convictions and breaches of the tenancy agreement may warrant termination of tenancy. See Food and Health Bureau (2018). and (iii) separating stall tenants by the types of goods that they sell.
However, there are some reservations over the extent to which market forces should come into play in the management reform. In particular, concerns have been raised over outsourcing market management using the single operator market model13Legend symbol denoting Under the single operator market model, a single tenancy for a market is awarded to an operator, which will be responsible for the management of the whole market, including subletting market stalls to individual stall operators. See GovHK (2017)., which might result in increased rental burden for stall tenants. It has also been suggested that, insofar as markets serve a social function, stall tenants should be supported in providing food and daily provision at an affordable price.
Revitalization of public markets in Singapore
- Similar to the case of Hong Kong, the hawker centres in Singapore were first built decades ago to resettle on-street vendors. Since then, the Singaporean government has invested in the enhancement of hawker centres. For example, it committed S$420 million (HK$1.83 billion) in 2001 to retrofit all existing hawker centres, and announced plans in 2011 to progressively build 20 new hawker centres across the city state.14Legend symbol denoting All existing hawker centres were successfully upgraded in 2013. As for the 20 new hawker centres, there are seven already in operation and the others will be completed by 2027. At present, the National Environment Agency ("NEA")15Legend symbol denoting NEA is a statutory board under the Ministry of Environment and Water Resources responsible for improving and sustaining a clean and green environment in Singapore. See National Environment Agency (2020c). regulates 81 hawker centres, 16Legend symbol denoting At present, NEA also regulates 33 standalone food centres in Singapore. See Data.gov.sg (2017) and National Environment Agency (2020c). of which three are standalone wet markets and 78 contain both a wet market and cooked food centre. The stalls in hawker centres are generally divided into cooked food stalls and market stalls which sell fresh food and daily provision.17Legend symbol denoting Among all the stalls in the hawker centres, 57% are market stalls whereas the remaining 43% are cooked food stalls. See Department of Statistics Singapore (2020) and Data.gov.sg (2017).
- Compared with Hong Kong, Singapore has afforded greater recognition for the social function of hawker centres in providing affordable food produce and daily necessaries, opportunities for business and employment, and public space for the community. In conjunction with the development of new hawker centres, the city state has adopted a number of measures to enhance market management, support new and incumbent tenants, and promote a more vibrant environment. Consequently, hawker centres have recorded frequent visits and a satisfaction rate above 90% since 2014.18Legend symbol denoting The results are based on NEA's biennial Perception Survey of Hawker Centre Patrons conducted in 2014, 2016 and 2018 respectively. See National Environment Agency (2019b).
Enhanced management model for hawker centres
- Since 2015, the Singapore government has implemented an enhanced market management model at all seven newly-developed hawker centres. Under the socially-conscious enterprise hawker centres ("SEHC") model, NEA invites tenders from social enterprises to manage a designated hawker centre,19Legend symbol denoting There are currently five privately-owned social enterprises operating seven SEHCs, one of which contains both a wet market and cooked food centre. with priority given to tenders that propose lower stall rentals and better methods for stall allocation. SEHC operators are subject to performance reviews every three years, but they are given flexibility to decide their own business strategy, optimize the tenant mix, and enhance market vibrancy. For instance, some operators have introduced service innovations such as e-payment adoption, shuttle bus, and island-wide food delivery.20Legend symbol denoting See National Environment Agency (2018).
- Following the adoption of the SEHC model, there were reportedly concerns that it has led to higher rental charges and unclear contract terms.21Legend symbol denoting The median monthly rent for the seven SEHCs was around S$2,000 (HK$11,620) in 2018, as opposed to the median monthly rent of S$1,700 (HK$9,877) for the existing NEA-run hawker centres. According to the Singapore government, the slightly higher rental charges account for the fact that the seven SEHCs are new and equipped with better amenities and facilities. See Today (2018). In response, NEA conducted a review in 2018 to fine-tune the model. SEHC operators were subsequently asked to (a) remove contractual terms which imposed undue restrictions on tenants;22Legend symbol denoting According to NEA, the key changes to the contractual clauses related to stall operating days and hours, security deposits and termination notice periods, capping of liquidated damages that can be charged to stallholders for breaches, and waiving of legal fees related to the tenancy. See National Environment Agency (2019a). and (b) refrain from raising rents or operating charges23Legend symbol denoting The operating costs generally cover service and conservancy charges, utilities and table-cleaning fee for cooked food stalls. during the tenancy term.
Points demerit system for cooked food stalls
- NEA also has in place a points demerit system to ensure a sound and hygienic market environment. Under the system, fines24Legend symbol denoting The fine for serious and major offences ranges from S$300 to S$500 (HK$1,670 to HK$2,780), whereas the fine for minor offences is S$200 (HK$1,110). and/or demerit points are issued for public health offences at cooked food stalls. Serious offences such as the sale of unclean food will incur six demerit points and a fine. Major offences, such as placing unclean materials in contact with food, will incur four demerit points and a fine. Minor offences such as failure to display a licence in the premises will only incur a fine. Depending on the stall's previous record, its licence might be suspended or revoked if a licensee accumulates 12 or more demerit points in a year.25Legend symbol denoting In general, a two-week suspension is served upon a licensee who incurs 12 demerit points within a year. If another 12 points is incurred a year after the first suspension, the licensee will be served a four-week suspension. If the licensee incurs an additional 12 points a year after the second suspension, his or her licence will be revoked. See National Environment Agency (2014).
Support for incumbent and new tenants
- The Singapore government supports new and incumbent tenants to provide food and daily provision at affordable prices. For instance, rental concessions are granted when tenants are affected by major renovation works or adverse operating environments.26Legend symbol denoting Following the Coronavirus Disease 2019 outbreak, a five-month rental waiver was also granted to tenants in hawker centres. See Ministry of Finance (2020). In order to help newly-developed hawker centres develop their clientele, tenants in these centres also benefit from a staggered rent scheme27Legend symbol denoting Under the staggered rent scheme, tenants in newly-developed hawker centres can receive a 20% and 10% rental rebate in their first and second year of operation respectively. See National Environment Agency (2019c). during their first two years of operation.
- Apart from rental concessions, the Singapore government provides funding support to enhance the operational efficiency of hawker centres. For instance, the Hawkers' Productivity Grant enables both market and cooked food stalls to claim up to 80% of their cost for purchasing automated equipment such as meat cutters, food processors and wireless paging solutions.28Legend symbol denoting The Grant was introduced in 2017 and initially benefited cooked food stalls only. Since March 2020, the Grant has been extended to cover all other market stalls in hawker centres. As a requirement, the automated equipment should result in significant man-hour savings for the stallholders. See National Environment Agency (2020d) and The Strait Times (2020). Since June 2020, stallholders are also encouraged to minimize physical contact with customers by adopting e-payment. Stalls which show sustained use of e-payment solutions can receive a maximum monthly subsidy of S$300 (HK$1,668) for a period of five months.29Legend symbol denoting Under the Hawkers Go Digital scheme, stallholders are eligible for the e-payment bonus for up to five months, provided that they have completed at least 20 e-payment transactions of at least S$1 (HK$5.5) in the previous month. See Infocomm Media Development Authority (2020).
- In the face of an ageing hawker population and the ensuing succession problem,30Legend symbol denoting The median age of hawkers in Singapore is 60 years old. See National Environment Agency (2020b). Singapore has identified a need to sustain hawker centres for future generations. Since 2018, an incubation programme has enabled individuals to operate cooked food stalls on a trial basis. Under the programme, a number of incubation stalls are provided to new entrants with sound business plans. These stalls are offered at 50% of market rent for nine months followed by 75% of market rent for another six months. After the trial period, participants can continue to operate the stall at the same location.31Legend symbol denoting As at April 2020, there were around 10 incubation stalls open for application. See Channel News Asia (2019).
Measures to enhance market vibrancy
- NEA has supported the hosting of community-centric activities inside hawker centres since 2017. Under the Vibrant Hawker Centres Programme, NEA provides up to S$2,000 (HK$11,120) for community or educational entities to organize not-for-profit events. The proposed event should make use of the vacant space inside a hawker centre and relate to the surrounding community, covering activities such as culinary workshops, art performances, and public dialogue sessions.32Legend symbol denoting See National Environment Agency (2020d).
Concluding remarks
- The vibrancy of public markets depends on a host of factors such as their built environment, trade mix of goods, and management approach. In Hong Kong, the Government's management reform of public markets has raised concerns as to whether it could adequately enhance market vibrancy without adversely affecting the operation of tenants.
- Compared with Hong Kong, Singapore has placed greater emphasis on the social function of public markets. In particular, the management of newly-developed hawker centres has been outsourced to social enterprises which are given the flexibility to optimize tenant mix and provide service innovation. At the same time, the government provides various incentives so that incumbent tenants can offer food and daily provision at affordable prices, whereas new entrants are supported by an incubation programme with concessionary rent.
Prepared by Charlie LAM
Research Office
Information Services Division
Legislative Council Secretariat
12 November 2020
Endnotes:
References:
| Hong Kong
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| 1. | Audit Commission. (2015) Public Cooked Food Markets Managed by the Food and Environmental Hygiene Department.
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| 2. | Food and Health Bureau. (2018) Overall Landscape and Positioning of Public Markets.
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| 3. | Food and Health Bureau. (2019) Vacancy Situation in Public Markets and Related Issues.
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| 4. | Food and Health Bureau. (2020a) Development of New Public Markets and Implementation of the Market Modernisation Programme.
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| 5. | Food and Health Bureau. (2020b) Replies to initial written questions raised by Finance Committee Members in examining the Estimates of Expenditure 2020-21.
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| 6. | GovHK. (2017) LCQ13: The Hong Kong Housing Authority's Single Operator Markets.
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| 7. | Legislative Council Secretariat. (2019) Report of the Subcommittee on Issues Relating to Public Markets.
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| 8. | MaD Social Lab：《香港街市的管理和營造》，2019年。
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| Singapore
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| 9. | Channel News Asia. (2019) New training programme, enhanced incubation stall programme to support aspiring hawkers.
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| 10. | Data.gov.sg. (2017) List of Government Markets Hawker Centres.
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| 11. | Department of Statistics Singapore. (2020) Hawkers and Food Establishments.
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| 12. | Hawker Centre 3.0 Committee. (2017) Hawker Centre 3.0 Committee Report.
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| 13. | Infocomm Media Development Authority. (2020) Hawkers Go Digital.
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| 14. | Lee Kuan Yew School of Public Policy. (2015) Keeping Char Kway Teow Cheap - At What Price?
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| 15. | Ministry of Finance. (2020) Supporting Our Businesses.
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| 16. | National Environment Agency. (2014) Frequently Asked Questions - Revision of demerit points for food hygiene offences under the Points Demerit System (PDS).
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| 17. | National Environment Agency. (2018) Management model for new hawker centres is at its early stage and needs time to evolve.
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| 18. | National Environment Agency. (2019a) Factsheet on Hawker Centres.
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| 19. | National Environment Agency. (2019b) High Majority of Patrons Satisfied with Hawker Centres.
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| 20. | National Environment Agency. (2019c) New Staggered Rent Scheme at Upcoming Hawker Centres.
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| 21. | National Environment Agency. (2020a) A Guide to Articles of Sale.
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| 22. | National Environment Agency. (2020b) Hawkers' Development Programme - FAQ.
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| 23. | National Environment Agency. (2020c) Hawker Management.
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| 24. | National Environment Agency. (2020d) Hawkers' Productivity Grant.
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| 25. | National Environment Agency. (undated) Rental policy for stalls in hawker centres and wet markets.
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| 26. | Singapore Food Agency. (2020) Food hygiene standards in Singapore.
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| 27. | The Strait Times. (2020) Grant to help boost hawkers' productivity expanded.
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| 28. | Today. (2018) Discussion over social enterprise hawker centres partly fuelled by "well-meaning but misinformed" comments: Amy Khor.
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Essentials are compiled for Members and Committees of the Legislative Council. They are not legal or other professional advice and shall not be relied on as such. Essentials are subject to copyright owned by The Legislative Council Commission (The Commission). The Commission permits accurate reproduction of Essentials for non-commercial use in a manner not adversely affecting the Legislative Council. Please refer to the Disclaimer and Copyright Notice on the Legislative Council website at www.legco.gov.hk for details. The paper number of this issue of Essentials is ISE07/20-21.