No one expects a free lunch but neither do we want to be ripped off. NTUC Foodfare Co-operative Limited was set up so the public wouldn't be at the mercy of cooked food operators.

Many would remember how prices of hawker food shot up after the Goods and Services Tax was introduced in April 1994. Even though hawkers need not charge GST, they took advantage of the opportunity to raise more than 3% of their original prices and rounded up the figure as well!

GST was not the only opportunity that hawkers, food retail operators and coffee shop owners had taken advantage off. Indeed, given the slightest opportunity - be it a Government announcement in a budget or an NWC recommendation of salary adjustment - food operators had been quick to reward themselves with price hikes.

Complaints certainly were aplenty. They found their way into newspapers and were aired on radio talk shows. The issues even found its way into Parliamentary debates. It was time to do something constructive about it.

Just as the supermarket cooperative and healthcare cooperative managed to set benchmark prices for the goods and services they supplied, the National Trades Union Congress was sure that a cooked food cooperative could do as much. A year later, NTUC Foodfare Co-operative Limited was set up in response to public concerns over rising prices of cooked food.

NTUC understood that hawkers, coffee shop owners and stall operators were no different from factory or office workers who desired a better quality of living, and the only way they knew how to achieve that was to make bigger profit margins, that is, raise prices or cut down on the serving portion and amount of ingredients.

Food retail operators had little or no idea that they could join forces in bulk purchases to attain economy of scale or that they could improve on their margin with improved productivity. Most of these operators worked as individuals and all they knew was to increase prices time and again.

Costly renovation works as well as increased cost in shop or stall space further add on to hawkers' desire to increase price so as to up their profitability.

In setting up the cooperative, NTUC Foodfare aimed to work with hawkers to improve efficiency and eventually to establish a presence in various hawker centres and coffee shops through franchising, with the individual stallholder remaining as his own boss. However, it needed to acquire its own expertise in food development, production and management before it can even franchise its system and products.

NTUC Foodfare has invested $4 million in a central kitchen in Senoko to prepare food for the Singapore Armed Forces and its various outlets. It has also been manufacturing a certain range of frozen food products for sale at NTUC FairPrice supermarkets.

One would think that preventing profiteering would be enough for NTUC Foodfare. No, it wasn't.

During the 1998 economic crisis, which brought on a spate of retrenchments and pay cuts, NTUC Foodfare cut its prices to help workers cope better. Drinks, for example, were sold at 5 cents less. Some quarters questioned the effect of this small change cut. But, NTUC Foodfare offered this rationale: For those who frequent hawker centres, a savings of 20 cents per meal added up to $200 a year.

This exercise cost NTUC Foodfare $670,000 a year. But more importantly, it put pressure on the other food operators to do the same.

Later, Foodfare passed on the cost of savings from rental rebates to its stallholders who, in turn, reduced cooked food prices by 10 per cent.

In May 2002, NTUC Foodfare announced it would absorb the 2 per cent increase in GST for six months when the new tax rate came into effect on 1 January 2003. The Government decided later that the new GST rate would be phased in, starting with 1 per cent on 1 January 2003. NTUC Foodfare not only adjusted the price at beverage counters, food stalls and snack kiosks but absorbed the GST on the rentals of stalls and asked its operators to maintain prices.

In August 2002, NTUC presented its social report card. NTUC Foodfare was reported as having the lowest price for common beverages and soft drinks compared to other coffee shops and food courts. Their prices are also lower or equal on selected cooked food items.

At a press briefing, NTUC Secretary-General Lim Boon Heng said: "During the good times, NTUC cooperatives moderate cost increases by setting benchmark prices. During tough times, they have an added responsibility of helping workers tide over the difficulties.

"Cooperatives such as FairPrice, Foodfare, Healthcare and NTUC First Campus have also announced their commitment to help cushion the impact of the GST increase on Singaporeans. By taking the lead, NTUC cooperatives hope to set an example to other service providers."

Mr Lim explained while it is not possible for NTUC cooperatives to be the lowest priced for every item, they pledged to give workers and consumers the best value on a basket of essential items.

NTUC Foodfare operates 28 food outlets including coffee shops, food courts, food stalls and food kiosks in Singapore.