WHY IS NTUC INVOLVED IN BUSINESS?

Fairprice, Income, Foodfare, First Campus and so on, have become so synonymous with Singaporean lives. These brands have such strong branding that I believe many cannot articulate what NTUC actually does. It is first and foremost, a Labour Movement – whose existence is to advance the interests of the worker. With that simple background, we can then turn to exploring further.

There are two reasons why NTUC is involved in the running of businesses; the first would be the need of financial prowess.

The brands that you interact with: Fairprice, Income and so on – are not businesses. They are co-operatives. This means the money they make must be used to the benefit of the 800k odd NTUC members and the trade unions in association with the NTUC.

The unions and the NTUC then use this money to conduct their operations, which include a variety of welfare and assistance programs. For example:

• Labour movement launches $3m training grant to help PME members
• NTUC UCare Fund donates $1m to help the elderly
• FairPrice Foundation donates $1m

and also via various NTUC Programs:

• U Stretch vouchers
• U Care Back to School vouchers
• NTUC Gift Group Insurance
• SLF Hardship Grant

Helping workers tide over tough times, financial assistance, retraining and networking are just some of the ways this money is being used.

Let us be honest: you need money and power before you can be of any help to anyone. The NTUC enterprises exist just for that reason.

There are many ways to raise funds – donations, selling small things and so on, but these activities aren’t sustainable. You need a rock solid business. The concept of “social enterprises” had only in the past few decades begun to gain momentum. The NTUC cooperatives had been social enterprising even before the lingo became popular.

The criticisms Fairprice faces are a little…unfair. Some say they are “too big”, “too strong” and making “too much money”. Some say it is the “government trying to make money”, which is a silly remark because neither NTUC nor Fairprice is a government organisation.

Have a look at this data about commercial supermarkets:

• The Dairy Farm Group in 2013 made profit at US$480m
• The Sheng Shiong Group made over $158m
• In the same period, Fairprice’s profit was $139m

Fairprice may be big and visible, but when you compare it with the other for-profit giants out there, they’re relatively tame. When foisted into a market of big boys with deep pockets, Fairprice is forced to grow and compete or face being bludgeoned out of business. The company is in no position to help union members, let alone fight profiteering and blackmarkets if it didn’t have financial muscle.

 

The next reason for the existence of the NTUC enterprises; is that of price stability.

Whether it is hawker center food or supermarket groceries, the presence of the enterprises prevent private companies from profiteering. If hawker centers were allowed to be run by places like Food Republic and supermarkets were run by Cold Storage, you’ll find that the price of necessities increase in no time.

In times of emergency (such as the haze, egg crisis and SARS emergencies etc) the co-operatives have another role: to prevent profiteering, to stop blackmarkets from forming and to ensure supply so that people don’t go into panic buying.

For a country that doesn’t produce its own food, we have managed to keep food costs very low and stable. It is a fact that we are at the mercy of exporters around the globe, but I believe many of us have taken these low prices for granted.

There is an NTUC Foodfare at Marina Bay Financial Centre. Despite the high rentals, Foodfare provides cheaper food options. For example, a cup of coffee there costs 90 cents. If they weren’t there, the Ya Kuns and Starbucks would dominate with $1.70 – $8 coffees and perhaps even raise it for lack of competition.

These social enterprises are just one part of the picture. It is not the NTUC’s core business. The NTUC true work is that of a confederation of trade unions and they’re in the business of industrial politics. They exist to act as a counterweight to the powers that employers have. To protect and negotiate on behalf of its members.

All this is made possible through the existence of the social enterprises.

The money you spend at Foodfare, Fairprice and so on goes very far. It goes into helping the single mother who got retrenched. It goes into helping the cleaning aunty get a better pay and it goes into helping a low income family whose sole breadwinner was rendered disabled in an accident.

The profits are pooled into this complex machinery called The Labour Movement and is pumped directly to the advancement of the Singaporean worker.

 

 

Categories: Observations, What's New?

1 reply »

  1. Many has benefitted from the Social Enterprises with out noticed the different. On fact, these enterprise S start by People who see the need, they want it to served the needs of Social Level. Some may preferred commercial operators, That’s understandable. Some who expect the charges to be the chapest in town.

    Can you imagine without Social Enterprise, we will be under a commercialised society. Prices are not regulated, would it be social problem? I personally believe to succeed in this effort, we need to operate it with a macro objective, ie to work together with the govt so that we can all achieved it purpose.

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