More costly bread in Malaysia: Gardenia raises prices of several products due to ‘increasing costs’

By Pearly Neo contact

- Last updated on GMT

Malaysia’s Gardenia Bakeries (KL) Sdn Bhd has confirmed the raise of the prices of several of its best-known bakery products. ©Getty Images
Malaysia’s Gardenia Bakeries (KL) Sdn Bhd has confirmed the raise of the prices of several of its best-known bakery products. ©Getty Images

Related tags: Malaysia, Bread, Bakery, Price increases

Malaysia’s Gardenia Bakeries (KL) Sdn Bhd has confirmed the raise of the prices of several of its best-known products, sparking consumer uproar.

“The prices [of the affected Gardenia products] will be going up as of November 1,”​ a Gardenia spokeswoman told us.

Amongst the products affected are some of its spreads (rising from between RM0.15/US$0.04 to RM0.50/US$0.12) and flavoured loaves (rising by RM 0.15/US$ 0.04).

All four flavours of its popular traditional cream rolls (vanilla, corn, butterscotch, chocolate) will see a RM0.05/US$0.012 increase to RM0.85/US$0.20.

Other products like sliced bread, Squiggles, and Twiggies will not be affected by the increase.

“We are not able to hold (down) the prices of the above products due to the increase in manufacturing, operation, distribution and other costs,”​ said a Gardenia spokesman to Free Malaysia Today​.

“As for the rest of our products, we are currently absorbing the costs that have increased and will strive to improve our productivity and efficiency,”

Cost increases mentioned included those for taxable supplies such as chocolate, vegetable shortening and packaging. Local reports state that this is due to the recent introduction of the Sales and Service Tax (SST)​ in Malaysia.

According to FMT,​ a statement from Gardenia Bakeries (KL) CEO Koh Chin Huat to retailers went viral online a few days before the price rise. As of November 1, the statement and relevant posts appear to be unavailable on the web.

Price rises and other controversies

In 2017, Gardenia had already increased the prices of 18 of its products, because they were ‘unable to hold on to the price of the [products].’​ This included sliced bread, which many Malaysians regard as a staple food item.

This decision drew wide online flak and uproar. Many netizens said they would be boycotting the brand, and switching to its closest local competitor Massimo instead.

In 2013, rumours that Gardenia would be increasing its prices were widely circulated online and in mainstream media. The company finally had to issue a statement to clarify the matter.

“Gardenia has been subject to a series of incredible lies spread by some people,” ​said then-CEO of Gardenia Bakeries (KL), Yap Kim Shin.

“The latest lie is that the price of our bread has been increased. This is totally false. […] These lies and slander are aimed at sabotaging Gardenia.”

Earlier, Gardenia had been labelled a ‘crony company’​ of the country’s then-ruling political party, and had apparently been ‘directed’​ to stop purchasing flour from particular flour mills.

In an effort to stop the speculation, Gardenia published a full-page advertorial on its website clarifying the matter.

“Gardenia is everything that a good Malaysian company should be,”​ it said.

“Our commitment […] and achievement is the envy of everyone, our competitors included. This envy has resulted in the circulation of many malicious rumours and falsehoods.

“We all should not be a party to this exploitation and manipulation.”

Gardenia in Malaysia

Gardenia is one of Malaysia’s most well-known bread manufacturing brands. As of 2015, it held some 60% of the bread manufacturing market share in Malaysia, according to Gardenia’s Desmond Teh in a presentation at the Bakery Equipment Manufacturers and Allieds (BEMA) annual meeting.

Gardenia also claims to be the largest bakery in South East Asia. It has five production facilities in Malaysia.

As far back as March this year, the company may have already expected costs to rise.

In the group’s 2017 annual report, the Joint Group Managing Directors of QAF Limited (which owns Gardenia) reported that: “[The] Group may be exposed to […] escalating costs especially higher energy costs, raw material (including feed and flour) prices, environmental compliance cost and maintenance expenditure.”

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