COVID-19 in Malaysia: Food industry recovery thwarted as half of states refuse to leave lockdown

By Pearly Neo contact

- Last updated on GMT

The F&B industry in Malaysia has called for food businesses in all states nationwide to ‘concurrently resume’ as per the government’s recent loosening of COVID-19 related lockdown restrictions, but has hit a snag with seven of the nation’s 14 states refusing to restart operations. ©Getty Images
The F&B industry in Malaysia has called for food businesses in all states nationwide to ‘concurrently resume’ as per the government’s recent loosening of COVID-19 related lockdown restrictions, but has hit a snag with seven of the nation’s 14 states refusing to restart operations. ©Getty Images

Related tags: Malaysia, COVID-19

The F&B industry in Malaysia has called for food businesses in all states nationwide to ‘concurrently resume’ as per the government’s recent loosening of COVID-19 related lockdown restrictions, but has hit a snag with seven of the nation’s 14 states refusing to fully restart operations.

Malaysian Prime Minister Muhyiddin Yassin announced via a live broadcast that ‘almost all economic sectors and business activities will be allowed to operate from May 4’​, including food manufacturing operations, after a lockdown that has lasted around six weeks​ since it was implemented in the form of a Movement Control Order (MCO) in March.

This loosening of restrictions has been deemed the Conditional Movement Control Order (CMCO).

The primary reason for this was clear: the economy. According to Muhyiddin, the country’s economy has been hit with daily RM2.4bn (US$556mn) losses since the MCO started to reach a total of RM63bn (US$14.6bn), and a further month of this would see another RM35bn (US$8.1bn) in losses.

But this move was frowned upon by half of the country: Seven out of Malaysia’s 14 states, to be exact. The local governments of these states - Penang, Selangor, Pahang, Kedah, Sabah, Sarawak, and Negeri Sembilan - ‘rebelled’ against Muhyiddin and disallowed full reopening of the economy, saying that they are ‘not yet ready’ or it is ‘not yet safe’.

The impact of this ‘rebellion’ is significant: Selangor is one of the country’s major manufacturing hubs with most factories located in industrial zones here, Penang is economically the most advanced state in North Malaysia, Pahang is the largest state in West Malaysia, and Sabah and Sarawak together make up the whole of East Malaysia.

This is especially so for the food industry, as many major food companies across various categories from Nestle to Carlsberg have their main operations in Selangor and Negeri Sembilan, East Malaysia is an important source of raw materials for all sorts of production, Kedah is an important source of rice, Pahang produces a lot of palm oil, and Penang is a major transportation hub

Although food manufacturing has been labelled an essential service during the MCO, curbed manpower remains an issue​ due to travel restrictions, with Soh previously highlighting problems workers in the industry had surfaced about travelling to work even with the appropriate permits in hand.

As such, the local F&B manufacturing industry has stood strongly behind Muhyiddin’s decision to reopen the economy, and has pushed hard for the seven states to reverse their decisions to keep the MCO in place.

“[We] are sure [this timely move by the Government] has been based on very sound data and considerations,”​ said Federation of Malaysian Manufacturers (FMM) President Tan Sri Dato’ Soh Thian Lai.

“[The CMCO] is most welcomed and crucial towards ensuring a quick recovery of the economy which alongside all economies globally have been severely impacted by the COVID-19 pandemic.

“It is important that business operations in all states resume concurrently as there are inter-linkages between states. [Stopping] work in certain states will lead to major disruptions in the supply chain of goods and services and, at the same time, also impact the livelihood of the rakyat (people).

“Considering the importance of balancing public health with economic sustainability and the people’s well-being, FMM hopes the state governments can play their part to cooperate with the federal government in facilitating the restart of the economy.”

Nestle Malaysia has urged that government recommendations be ‘followed strictly’​.

“As Malaysia has just entered a phase of reopening the economy under the CMCO, we want to encourage all Malaysians [to] follow strictly the Government recommendations,”​ Nestle Malaysia CEO Juan Aranols told us in a statement.

“We are confident in Malaysia’s potential and capability to see economic recovery once the current COVID-19 crisis is behind us, and we are committed to play our part in supporting the nation and extending a helping hand to those Malaysians in need during this difficult time.”

Threats galore

In response to the seven states’ decisions, the federal government has, interestingly, opted to issue veiled threats instead of providing further concrete evidence that a shift to CMCO would be a good move.

According to International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali, these state governments could face legal action if they do not abide.

“Should the state governments refuse to co-operate in implementing Act 342 which has been gazetted into law enforceable throughout the country, the state governments may face the possibility of legal action from various parties, particularly the industry players,”​ he said in a press statement.

"Their actions are not founded on lawful authority and are contrary to the policy of the federal government, all the more so in view of the fact that the federal government's policy has already been made into law and is enforceable throughout the country."

The pressure from government and various industries has taken its toll, and as of May 12, Kedah is leaning towards reversing its earlier decision and complying with the national government, Sabah has loosened its stance somewhat to allow certain sectors to reopen, whereas Selangor’s reigning sultan (king) has attempted to supersede the local government’s decision to ‘rebel’. Pahang has partially acceded, allowing only 'green zones' (areas free from COVID-19) to move to CMCO.

The other states have maintained their positions.

That said, amidst the strong push to loosen restrictions, Muhyiddin also moved to extend the CMCO by a further month to June 9,  all standard operating procedures (SOPs) introduced remaining in place. It is unclear how much difference this will make with many sectors and offices allowed to open and crowds already beginning to form. 

Valid fears?

Confusion still reigns supreme, made worse when Health Director General Noor Hisham Abdullah whom many Malaysians regard as the nation’s ‘real hero’ in facing COVID-19 advised businesses not to rush to reopen during his daily COVID-19 press conference.

“It is not necessary to actually start one’s business on Monday itself. While it was mentioned earlier that the economic sector will be permitted to operate, [some] sectors will still be delayed,”​ Dr Noor Hisham said.

“My message is very clear; those working in the other sectors please stay at home. It is the safest place in the world right now for you to break the COVID-19 chain of transmission. Equally important is social compliance and social responsibility. The onus now is not solely on the ministry, the onus is also now on the public to do so as well if we are to ever succeed.”

Many citizens also fear that Malaysia is following in the footsteps of Hokkaido which lifting its COVID-19 restrictions ‘too soon’, leading to a second wave of infections – they believe that the CMCO will also hasten the arrival of another wave of infections in Malaysia which the local health system is not likely to be prepared for.

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