Food vendors and bakers in George Town, Penang, are shouldering the cost of rising egg prices following Malaysia’s removal of egg subsidies, prioritizing customer satisfaction in a competitive market. Phor Yok Eng, a 62-year-old char koay teow vendor, and M. Tan, a 34-year-old baker, exemplify this resilience, opting to absorb price increases rather than pass them on to customers.
The Agriculture and Food Security Ministry announced the lifting of price controls on chicken eggs, effective 1 May, reducing subsidies from 10 sen to 5 sen per egg, with full abolition planned for 1 August. The government spent nearly RM2.5 billion on egg subsidies from February 2022 to December 2024, driven by production cost spikes during the COVID-19 pandemic and the Ukraine-Russia war. The ministry cited the unsustainability of prolonged subsidies for the egg industry and national finances as the reason for the policy shift.
Phor Yok Eng’s Char Koay Teow Stall
Phor Yok Eng, who has run her char koay teow stall in Air Itam for 26 years, uses five trays of eggs daily, sourced from a local market. “I buy them daily at the local market here near my stall,” she said. She offers plates at RM5.50 without eggs and RM6.50 with an egg, noting, “I do offer the option of servings without eggs, which is cheaper, but many still prefer it with eggs, as it’s tastier.” Her prices are lower than competitors, but past price hikes two years ago drew customer backlash. “You must be mindful of your customers, as many of them are retirees,” she said, adding, “The removal of the price control on chicken eggs will affect me, but I will have to absorb it.” 
Phor’s decision reflects her focus on retaining loyal customers, many of whom are elderly, despite the financial strain of subsidy cuts. “While I know my pricing is considerably cheaper than other places, people will still grumble if I suddenly increase the price,” she said, highlighting the delicate balance of maintaining affordability in George Town’s vibrant food scene.
M. Tan’s Bakery Challenges
M. Tan, who operates a bakery producing pastries and cakes, faces similar pressures, using 30 trays of eggs weekly. “Eggs are our key ingredient after flour,” she said. “It is in pretty much everything we make at our bakery and, usually, each cake requires a few eggs, never just one.” In Penang’s competitive bakery market, raising prices risks losing customers. “There is plenty of competition when it comes to cake and pastry shops in Penang, especially on the island,” she said. “If I suddenly raise prices, I will lose customers as they can easily go somewhere else.”
Tan plans to take a profit cut to maintain prices. “It will add up to a hefty amount but I will manage it,” she said, underscoring her commitment to customer retention over short-term gains. Her strategy mirrors the broader resilience of George Town’s small businesses navigating economic changes.
A Broader Economic Context
The egg subsidy removal is part of Malaysia’s effort to balance fiscal sustainability with industry viability. The RM2.5 billion spent over nearly three years highlights the scale of support provided during global economic disruptions. By phasing out subsidies, the government aims to foster a self-sustaining egg production sector, though small businesses like Phor’s and Tan’s bear the immediate impact.
George Town’s food vendors and bakers, known for their culinary contributions to Penang’s Unesco-recognized food scene, demonstrate adaptability in the face of these challenges. Their focus on customer loyalty underscores the community’s role in sustaining the city’s reputation as a gastronomic hub.pact.
George Town’s hawkers and bakers, known for their culinary contributions to Penang’s Unesco-recognized food scene, demonstrate adaptability in the face of these challenges. Their focus on customer loyalty underscores the community’s role in sustaining the city’s reputation as a gastronomic hub.
