The economics of 1Malaysia Menu

The recently tabled 2012 budget, the BN one that is, looks too optimistic in its revenue forecast while total expenditure seems unchecked and I struggle to detect significant return or value for money expended.

1 of the flagship gimmick is the 1Malaysia menu.

For RM3.00, you can get rice, taugeh, chicken wings, beef or mutton?

According to the prime minister's budget speech:


74. The Government will undertake measures to ease rising costs and prices as well as reduce the burden of the rakyat, as follows:

First: Increase the number of Kedai Rakyat 1Malaysia (KR1M) nationwide in 2012. KR1M offers 250 types of 1Malaysia products, comprising consumer goods which are up to 40% cheaper. In view of the overwhelming response, the Government plans to open an additional 85 units in 2012 with an allocation of RM40 million;

Third: Extend and promote the Menu Rakyat 1Malaysia which offers popular menu sets at reasonable prices with a maximum of RM2 for breakfast and RM4 for lunch. Currently, more than 700 food operators are participating and this will be extended to 3,000 operators by end-2012. To further expand this initiative, the Government encourages all cafeteria operators in Government offices* and the private sector to implement the Menu Rakyat 1Malaysia.

* not only they get increment and bonuses without performance appraisal....
What form of "encouragement" is the PM talking about? Anyone knows you can't run business on a free. An operator has to pay rental (a mamak restaurant's monthly rental can easily hit RM10,000), salaries and wages, and ever escalating prices of foodstuff. Simply verbal encouragement and a road show visit by a smiling PM won't foot the operating expenses.

The prime minister have to be transparent and explain how 3,000 operators can and willing to participate. Are they being subsidised in some creative way via tax payers money?

We are all familiar with the modus operandi of 'compensation for not reaching supernormal profit targets' enjoy by highway concessionaires for example. When you get a discount during festive balik kampung, the government will hack off around RM800million of tax collected/debt raised to pay Plus and bill back the tax payers later. Tax money which should have been used for education, healthcare, public amenities ended up as a nice profit before tax in some listed company

Did the Prime Minister Depatment sent financial professionals to help these operators to do proper financial and sensitivity analysis to help them set pricing of their products to justify lower selling price hence higher volume which will generate enough income for the operator to continue to function?

Sorry, it is easy to poke a hole in it. Higher volume of sales equals to higher cost of sales hence by lowering selling price, the margin would be depressed instead. 

Similarly it goes with Mydin Group who is awarded the Kedai 1Malaysia franchise, a logo financed by tax money. How could it sold stuff cheaper by 40%? Is there a hidden subsidy somewhere? Did Najib administration have a written agreement with favourable terms for Mydin Group to enable it to use a trademark paid by taxpayers and  undercut all other retailers facing business risk on their own?

You see, if I want to start a Old Town Coffee franchise for example, I need to pay the following:

Franchise Fees : RM80,000.00n
Franchise Term (years) : 5
Royalty : 5%
Marketing / A & P Fund : 3%
Estimated Initial Capital : RM600,000 - RM800,000
(source: Old Town Coffee's web page)

So the billion ringgit deficit questions are:

1) Is the PM's form over substance gestures above creating unfair playing field between selected operators and others who are on their own, trading on actual and at-arms' length terms (i.e. not subsidised)? In other words, the advocate of 1Malaysia has in fact created a form of discrimination instead?

2) Is this unfair playing field fair (obviously not), transparent and  not killing off genuine operators? How many genuine stores and livelihood will be killed off when the economic outlook next year is forecasted to be gloomy and gloomier?

3) who are the operators and is there any special relations or connection between them and the politicians in charge at the moment?
4) What is the economic sense and financial feasibilities that enable such operators to charge such low prices? How, by charging much lower than prices other operators are charging, these selected businesses can survive? Businessmen won't simply do charity, especially those not on scale of Shell, Starbucks or other multi national corporations.

 Political donation is a fact of life, whether it is via direct cash contribution or goods and services supplied at discounted prices. Businessmen can either donate voluntarily or due to "necessity".

However, for an administration that flaunts political donation as if it is a miraculous gesture of its own, that is certainly bad taste and no good grace.

A budget is suppose to give the tax payers and the people a sense of direction and assurance; not more question marks

Stay tune, fellas, for the PM to answer YB Teo Nie Ching's parliamentary question:

5.  Puan Teo Nie Ching [Serdang] minta PERDANA MENTERI menyatakan syarat-syarat perjanjian dengan Kumpulan Mydin yang menggunakan logo 1Malaysia untuk membuka kedai runcit khasnya adakah kumpulan ini mendapat bantuan kewangan atau subsidi membolehkannya menjual barang dengan lebih murah dan memudaratkan perniagaan-perniagaan lain. [25/10/2011

Thanks YB.


  1. When I visited the Kedai 1Malaysia in Kelana Jaya recently,the only item I noticed with discount of 40% is Drinking Water (30sen for 500ml. In hard times like who want to buy bottled water. Secondly, the main staple food like fish, meat, onions except are not on sale except for rice (Beras hancur only) and sugar which is at the contolled price. Overall I find it cheaper to market in Tesco.

  2. thanks Anom for the valuable input just show what this store is really all about...did you also notice the big banner for that Kedai with a big smiling face hanging outside? The banner looks bigger than a house

    Wee Tak

  3. Let's compare an apple with an apple. Whoever can do this, pls do it.

    And pls dont just look into lower grade goods. What is the govt telling me to do? from middle income, go down to lower income lifestyle? anymore tightening, might as well dont wear pants!


    written by whlau, October 20, 2011 15:24:05

    The MACC should investigate how our PM can have a RM3 meal with extras on his plate when others do not. Is this bribery? It's enough that these VVIPs live off the blood, sweat and tears of most of the rakyat and here we have them coming to the Menu Rakyat 1Malaysia restaurant to take some more off the poor man's meal??? Hope they choke on the food!
    written by LGQ, October 20, 2011 14:54:09

    The 1Malaysia meal cost RM5 over here in East Malaysia, not RM3 (and the breakfast cost RM2 here, instead of RM1). And it looks nothing like the meal that the PM was enjoying in the media. In fact, it looks subpar. I don't think we import rice or chicken from West Malaysia, so what's with the RM2 increase? I'm pretty sure those meals were locally made with local materials, so nothing warrants a RM2 increase in price, surely not the usual exporting cost nonsense etc (why doesn't goods come directly to our ports in the first place anyway? Are our ports not good enough?).

    Last I checked East Malaysians have lower income, lousier infrastructures and more oil than West Malaysia, so why the hell is EVERYTHING more expensive over here? The cost of living in developed "big cities" in West Malaysia is actually cheaper than the cost of living in underdeveloped Sarawak and Sabah. Awwwww the irony.

    Do something about this madness BN (not just the damn 1malaysia menu, but EVERYTHING. Frankly, those damn meals are the least of East Malaysia's problems). Or we'll get rid of you.


  5. written by joe black and karpal the bayee kondeh, October 20, 2011 13:25:27

    these are all con jobs. i malaysia- everyone wants to make extraordinary profits. nobody thinks of helping the poor. if u want to help the poor- make sure there are no muslims in the group- then some one will say you are prolethysing. we shud put up signs at soup kitchens taht all male recepients must drop their pants to show that they hv not been sunat and therefore not a muslim only then shud they be fed. no open no food.
    i am going to exclude muslims fr the group of people that i help starting today.
    written by Ginteng, October 20, 2011 12:32:56

    Before long,they will all end up in the rubbish heap....and all the building exterior will be fully
    plastered with FOR SALE/ RENTAL signs.....along with hundreds of Along stickers.
    written by ABU PANDIR, October 20, 2011 12:13:33

    My Ass you can get RM4 per meal these days comprising fish, chicken and vegie unless PM Najib ask FLOM to cook with ingredients they get for free.
    Please do not continue to con the rakyat.Minister Ismail Sabri kindly monintor that these eatries sell at RM 4 per meal
    written by T.Roy, October 20, 2011 11:27:01

    My friend just went to one of this outlet and with only 3 types of food, it cost RM how to get RM 3 type of dish that the PM is enjoying as published in the newspaper?? Maybe there are 2 prices, one for the VIP/VVIP and the rest for normal citizens
    written by Pegasus, October 20, 2011 11:18:35

    Just give them six months will be enough to know whether these 1malaysia ameno inspired will work or not... only matter of time will tell....

  6. 1Malaysia meal@RM3, my foot, I cant even find these restaurants.

  7. The second major principle is that the office will be open and transparent in all dealings and be accountable for all actions and decisions, and be open and adopt the intent of the taxpayer's charter.