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China's catering industry growth at 9-year low

(China Daily)

13:09, September 12, 2012

China's catering industry has seen a three percent drop in profits this year, to its lowest growth rate in nine years.

Su Qiucheng, president of the China Cuisine Association, told delegates at the China Catering Industry Leading Entrepreneur Summit in Beijing that profit growth fell to 13.1 percent during the first half of the year, lower than the Ministry of Commerce's estimate of 16 percent during the 12th Five-Year Plan (2011-15).

Taxes, rent, and the costs of raw materials and labor are all rising, as the businesses' profits continue to fall, Su said.

The average costs of ingredients last year rose 14.63 percent compared with two years ago, leading to a 5 percent decrease in gross profits.

The rent for restaurants has seen a steady increase too, as have the costs of labor, electricity and water. The prices of electricity and water for catering enterprises are 20 to 60 percent higher than they are for industrial companies.

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