MELAKA - Some 2,000 Chinese coffee shops and 400 Indian-Muslim and banana leaf restaurants ceased operations in 2017, says a joint committee representing the owners.
They attributed the closures to not having enough workers, including foreign workers.
The Malaysia-Singapore Coffee Shop Proprietors General Association (MSCP), Malaysian Indian Restaurant Owners Association (Primas) and Malaysian Indian-Muslim Restaurant Owners Association (Presma), have also sent a joint memorandum to the government urging it to look into their predicament immediately.
MSCP president Ho Su Mong said 10 per cent to 15 per cent of its 20,000 members throughout the country closed shop in 2017.
He said the situation could worsen as thousands of foreign workers who returned to their home countries during the Chinese New Year festive break had not returned.
"This means we are looking at more businesses closing down as the procedure for rehiring has been made complicated and more stringent," he said on Sunday (March 11).
Mr Ho said members are also facing a lot of pressure from the conditions set by the authorities for hiring foreign workers.
"Chinese coffee shop owners would be badly hit if the authorities don't see that such workers are an integral part of their operations," he said.
Primas secretary-general T. Thanabalan said many banana leaf rice restaurants are expected to close down this year as they are due to replace their foreign workers.
"The problem of getting approval for foreign workers has been unresolved for three years," he said.
"The system of getting replacements has been made very stringent and there is no way small players can meet all the conditions required by the government."
Mr Thanabalan said the owners need to go through a rigorous process to meet the requirements of government departments or agencies, making rehiring very challenging.
"Hence, the cleanliness of restaurants has also been compromised (as a result of the worker shortage) and this resulted in more issues, such as summonses from local councils," he said.
Mr Thanabalan said the affected restaurants are owned by Malaysians and some have been in existence for a long time.
"We are not like giant international franchises that can cease operations and focus their businesses in other countries if it's hard to get manpower in one location," he said.
Mr Thanabalan said the joint memorandum to the government was sent in the hope that the Prime Minister and Deputy Prime Minister would intervene to resolve the operators' woes.
"We are in dire straits and the only way out is to cease operations. At the end of the day, traditional eateries may no longer exist in the country," he added.
Presma president Ayub Khan echoed the sentiment and said his association also anticipates more Indian-Muslim eateries closing down this year.