Beverage prices at coffeeshops climb in spite of Indranee Rajah’s assurance that drinks prices “should not” rise with water price hike

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The Chinese daily reported last Friday (4 May) that beverage prices at several coffee shops have gone up as a result of the water price hike by the government. At one coffeeshop, the prices of coffee, tea and canned drinks have increased by $0.10 while the price of beer has climbed by $0.20.

This coffeeshop, the Kim San Leng coffee shop at Bishan Street 13, is one of several in a chain of coffeeshops owned by grassroots leader Hoon Thing Leong that have imposed the beverage price hike. Reporters who visited the coffeeshop found a handwritten note pasted at the cash register that read, “Drinks Coffee increase $0.10”.

When the publication contacted Mr Hoon, he confirmed that the coffeeshops in his chain imposed the drinks price hike from 1 May this year. He added: “We have not raised prices for 2 years. But in the last 1 year, our cost has increased by around 20%. So I think the price increase is reasonable.”

Mr Hoon – who sits on the boards of various associations, such as the Foochow Coffee Restaurant and Bar Merchants Association, besides serving as a grassroots leader – added that many coffeeshops increased their prices last July itself to cope with the hefty water price hike.

Mr Hoon, who was awarded the Public Service Medal by the Prime Minister when he served in the Environment Ministry in 1999, shared that his chain of coffeeshops is the last to raise their drinks prices.

The grassroots leader’s admission stands in stark contrast to the Government’s assurances that the water price hike should not affect beverage prices, after Finance Minister Heng Swee Keat announced last year that the price of water would increase by 30% to “reflect the higher costs of desalination and NEWater production.”

Speaking to reporters after Heng’s announcement, then-Senior Minister of State for Finance and Law Indranee Rajah assured that the water price hike would have “very minimal impact” on the price of coffee and tea. She emphasised that the cost of goods such as coffee and tea “should not and ought not” go up with the hefty water price hike, at a REACH post-Budget forum she chaired.

Indranee was promoted to full minister during the latest Cabinet reshuffle that went into effect this month. She now serves as Minister in the Prime Minister’s Office, Second Minister for Finance and Second Minister for Education.