Koornang Hot Bread bakery Melbourne forced to close cost of living pressure

A much-loved Melbourne baker is fighting to stay open after his landlord doubled the rent, as cost of living pressures continue to wreak havoc on small businesses in the wake of the Covid pandemic.

The future of Koornang Hot Bread, in the Melbourne southeastern suburb of Carnegie, appears bleak as the family-run business faces the prospect of closing its doors after 10 year.

Chief baker Na Nguyen, who is a refugee from Vietnam, says the business cannot afford the asking price for a new lease, which is jumping from $55,000 per annum to $115,000.

‘If I lose my business, I’ve got nothing. I’ll go home with nothing,’ Mr Nguyen told A Current Affair.

The heartbreaking story comes as national inflation reached 6.1 per cent in the year to June – the highest jump in over three decades.

Customers who flock to the popular shop to pick up freshly baked bread, pies and cakes, have rallied around the family with message of support.

Carnegie resident Chris Tsalakis even started a people power movement to keep the shop up and running.

‘They’re the backbone of the community and they’ve been here for a very long time,’ Mr Tsalakis said.

‘To see someone forced out of business, it’s just very upsetting.’

Mr Nguyen and his wife Thu began the bakery after arriving in Melbourne in the mid-1980s.

For Mr Nguyen it was a dream to be able to start his own business after fleeing Vietnam, where as a teenager he was conscripted into military service.

‘I was forced to go to the army of communists and they sent me to Cambodia. It was terrible,’ Mr Nguyen said.

He escaped to a refugee camp in Thailand and then went to New Zealand where he learnt the bakery skills he has put tirelessly into practice in Australia.

Mr Nguyen and his wife say they are ‘lucky’ to live in Australia but they certainly earn their luck by putting in 15 to 18-hour days seven days a week.

‘We normally wake up at midnight and then I go home at about 3pm or 4pm in the afternoon,’ Mr Nguyen said. 

‘If it’s busy, I’ll stay until six o’clock.’

‘We always work hard and pay tax. It’s better than someone who stays home to get paid from Centrelink. 

‘We (have) got a job; we do what we can do.’

The landlord has appointed property expert Michael Spektor, from the National Retail Group, to negotiate rent with the bakery.

‘Rents in the strip have been absolutely skyrocketing,’ Mr Spektor said.

‘The landlord’s a private family. In fact, the landlords are also immigrants. 

‘They turned up in this country looking for better opportunities back in the 60s and if anything, they’ve been more sympathetic to Nguyen and his family because they can empathise.’

‘But market rents in Koornang Road, Carnegie have gone ahead in leaps and bounds and so the landlord (is) just looking for a simple market rate return.

‘They understand small business. They understand it’s a family situation.’

The landlord has agreed that Mr Nyugen can stay at the site on a month-by-month arrangement until a tenant agrees to the new lease’s asking price or he finds another location for his shop. 

Commercial rents have been following the same upward trajectory with soaring residential costs in Australia hitting small businesses hard.

Head of the Franchise Council Mary Aldred, who represents thousands of small businesses, has called for more rules to help business tenants survive when landlords come down harshly.

‘I’ve heard examples of up to $100,000 on small business tenants that needs to be paid, you know, within a fortnight, or they’re going to change the lock,’ she told the ABC.

She believes a federal ombudsman should intervene where landlords are not playing fair.

‘Most landlords try and do the right thing. but we need a modern approach and a better regulation for behaviour of those landlords that don’t try and do the right thing,’ she said.