Fresh Market Capitalism

Fresh food is among the foundations of good health of the people. The more fresh the food, the more nutritious it is. But fresh food should also be affordable to more people. That way, good economics (stable, affordable prices) meets good health (fresh, nutritious food that help strengthen our immune system).

Last week, on our last day (November 08) in Hong Kong after attending the Economic Freedom Network (EFN) Asia Conference, November 6-7, 2014, a friend Simon Lee, organized a "fresh market tour" for interested EFN conference participants. It was a short, 1 1/2 hour tour as some of us have to catch our flight back to our respective countries in the afternoon or evening.

Simon and his two staff, Lisa and Paul, brought us to Lok Fu fresh market in Kowloon.

It was not a supermarket inside a big mall. Rather, just an open space on the ground floor of a ahigh-rise HK government housing. As these two pictures show, the vegetables are fresh, they did not look like they came from a freezer, unsold items the previous day/s.

Upon arriving at the site, Simon turned over the briefing to  Myron, a sharp, articulate, bright man who is an officer of The Link, the owner and administrator of the Luk Fo fresh market.

Below, our team. Simon Lee standing on left most, Myron is 3rd from right, with a portable microphone. More should have joined but our departure from the hotel was delayed by almost one hour because the bus that would pick us from our hotel somehow went to another location.

Myron quickly started the briefing. His English is good and fluent. He must have studied in UK or the US. Anyway, the place is very clean. No foul smell whatsoever, something that is familiar in public markets, non-mall supermarkets in the Philippines

This shop of dried food is cool. Neat and clean and only one person manages the  whole  store.

The fresh seafood  section. The floor is not wet, no mud or scattered fish body parts.

Crabs, seashells, other crustaceans. Some of those sea creatures I don't see in Philippine seafood markets. I would assume that some of these products are grown via aquaculture and not caught in the open sea.

Wow, those huge sea cucumber-looking creatures, I don't know their name. Although I am from a coastal city of Negros island in the Philippines and fishing is the main industry there, I don't see these products, nor in Manila's seafood markets.

Karthik Chandra from India, a fellow conference participant, was also amazed at the sights of fresh seafood that greeted us that day.

Another friend, Lorenzo Montanari from the Americans for Tax Reforms (ATR) in Washington DC seemed awed by the variety of these live sea creatures sold at affordable prices.

Then we sat on this simple row of tables where Myron gave more discussions, and we asked more questions. Some food samples, tea and red wine were also served us. Yummy and  nice.

Then Myron bid ba-bye and Simon took over and continued the mini-lecture. Then we went to a nearby shopping mall, also owned by The Link. Then we headed back to the hotel in HK island. That night, I and my family flew back to Manila.

The next day, Sunday, November 09, I visited the Tejeros public market, not far from  our house in Makati.

This is the fish and meat section of the public market. The sight and smell is too far out compared to the fresh market that I visited the day before.

The floor is wet with excess water that vendors pour on  their products.

There is also a vegetable section inside but there are more choices outside. The floor is not clean too.

On the other side of the road, there is a row of vegetable vendors. It was around 10:30 am and these veggies were exposed to direct sunlight. They get wilted of course.

These sights are common in public markets in the Philippines.

In another public market in Pangasinan province, this is the meat section. The chicken and pork are exposed to flies and some dust.

Tilapia, bangus (milkfish), galunggong, other seafood are laid on top of thin sheets of plastic and

Another photo of the same public market on another day. See how exposed the meat products are to flies. These pests are manually driven away by vendors through long sticks with tails at the other end.

A common hawkers' market, outside public markets, Manila.

Another public market in Quiapo, Manila. The exterior alone would tell you what to expect inside.

The Chairman of The Link Management Limited, which owns some 90 fresh markets and 150 shopping centers in Hong Kong,  Nick Sallnow-Smith, is a friend. Nick, me and other friends have attended the three Reading Club Salon, 2012, 2013 and 2014, organized by the Lion Rock Institute. It is a small group, by invite only round table discussion on various philosophical and some current day issues.

In his Chairman's Message, Nick wrote,

Successful companies create value for the community as a whole. If they do not, in the long run they will fail to provide sustainable returns for their shareholders. Businesses, indeed all organisations, cannot survive if they are parasitic upon a community, rather than forming a part of it. Any organisation needs to explain to its owners, customers, and to the community at large, what it is “for” in the broadest sense, placing the business activities of The Link REIT in a community context. 

The Link REIT’s business is very simple: we invest in, manage and operate property assets held by our Unitholders. These assets currently comprise shopping centres, car parks and a small number of other commercial assets in Hong Kong. If we are to succeed in maximising the value of these assets for our Unitholders, we need to attract the communities living and working around our locations to come and shop in our centres, rather than those of our competitors. Only if we achieve that objective can our tenants generate sales and fund the rents they pay to us. 

Amen to that, Nick. Only the free enterprise system and its fierce competition culture, not more government regulations, restrictions and prohibitions, can ensure good  service to clients and consumers. By raising the bar of competition, you and your team are giving lots of public service to  ordinary consumers.

I just hope that your model can be replicated by other entrepreneurs here in the Philippines and other developing Asian economies. But our politics and governments here are different. If the owner/s of existing public markets are friends to  incumbent politicians and Mayors, potential competing public markets cannot be given a business franchise or permit. So most big entrepreneurs here offer clean wet markets to  consumers only via supermarkets and  malls.

Myron, Acky and Kevin are nice and friendly people of The Link. Thanks to them. And thanks to Simon  and his team  too for that generous and free tour. HK photos, some from my camera phone, some from Lisa's dropbox link.
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See also:
Asian Capitalism Inching Up, September 21, 2010
Old Debate on Competition and Markets, June 15, 2012
The Pope and Capitalism, December 03, 2013
Lion Rock 16: 10th Anniversary of LRI, November 07, 2014