After 41 years in Hong Kong, the long-standing bakery chain Taipan Bread & Cakes, suspected of facing financial difficulties and rent arrears, announced the closure of all its outlets yesterday (June 24). Notices were posted outside multiple branches across the city, stating that due to recent "unforeseen and uncontrollable challenges," all operations will cease immediately.
Some employees revealed warning signs of the closure, with top management suddenly resigning earlier this month. On the eve of the shutdown, shareholders held a final meeting and transferred all branch cash reserves to headquarters.
The incident has left around 200 employees jobless, with approximately HK$35 million in unpaid wages and severance payments. Additionally, customers holding a large number of mooncake vouchers and cake coupons may find them worthless. As of 5 p.m. yesterday, the Consumer Council had received three complaints related to Taipan's closure.
Yesterday morning, Wen Wei Po journalists visited branches in Causeway Bay, North Point, Mong Kok, and Tuen Mun, finding all shutters down and closure notices posted outside. At the Mong Kok branch, court documents were affixed to the shutter, indicating repossession of the premises, while the landlord had also posted a listing notice. Peering inside, reporters saw nearly empty shelves, with only a few dairy products remaining in refrigerators.
Cash transferred to headquarters before closure: Employee
At Taipan's San Po Kong office yesterday, employees also found the doors locked. Mr. Lam, an employee of Taipan, disclosed that warning signs had been apparent for some time. "We could smell trouble early on. In early June, top management suddenly resigned. Since January, there have been delays in salaries, MPF contributions, rent payments, contractor fees, and supplier payments... so many people were left unpaid. The shareholders held a meeting in Wan Chai the night before and decided to transfer all branch cash reserves to the office before announcing the closure in the evening. It's similar to what happened with Ocean Empire Food Shop (a previous restaurant chain collapse), but even more irresponsible."
Beyond employees, customers holding Taipan cake coupons or mooncake vouchers were also affected. A customer who only learned of the closure after seeing the notice outside a branch expressed regret, having bought Taipan's snow-skin mooncakes every Mid-Autumn Festival for over a decade. Another customer mentioned having recently purchased cake coupons, with family members still holding unused ones. They had planned to redeem them soon, but were caught off guard by the sudden closure, though the financial loss was minimal.
Some customers visited branches to "check in" for memories, noting they had gradually used up stored coupons after hearing of Taipan's financial troubles. Ms. Shek, another customer, pointed out that while Taipan's snow-skin mooncakes remained prestigious, alternatives were readily available, so she wasn't worried about finding replacements.
Prepaid risks warning
The Consumer Council reminded the public that cake coupons and mooncake vouchers fall under prepaid consumption. As Hong Kong currently lacks specific regulations for prepaid services, merchants set their terms. If a business closes and cannot fulfill services, consumers become unsecured creditors, with lower priority than secured creditors (e.g., banks) during liquidation. Any remaining assets would be divided among unsecured creditors, meaning consumers might need to pursue legal action to recover losses.
The Council advised that those who used credit cards or other refundable payment methods for prepayments could contact their card issuers to check if transactions qualify for chargeback protection. However, such protections often have time limits, and late applications may be rejected.
Lawmaker urges regulations
Legislative Council (LegCo) Member and solicitor Doreen Kong, in an interview with Wen Wei Po, stated that cake coupon holders had minimal chances of successful claims. The only potential legal recourse would be under the Trade Descriptions Ordinance, but proving that the merchant knowingly sold prepaid services while aware of impending liquidation would be extremely difficult in court, making convictions unlikely.
She argued that, given Hong Kong's challenging economic climate, prepaid consumption risks have surged, and the government must urgently enact regulations. For example, requiring merchants to hold prepaid funds in bank trust accounts until services are rendered would protect consumers, allowing refunds if services cannot be provided.
Who bears the losses?
Affected employees sought help yesterday at Labour Department offices across districts, assisted by unions. The Catering and Hotels Industries Employees General Union received around 200 employee complaints, filing cases for 199 individuals involving unpaid wages, severance, and long-service payments totaling approximately HK$35 million.
Labour and Welfare Bureau documents revealed that the Protection of Wages on Insolvency Fund disbursed over HK$240 million in ex gratia payments last year, a nearly 60% annual increase, with over 4,000 approved cases, up 30% year-on-year.
The Labour Department noted that as of 3 p.m. yesterday, about 120 employees had registered claims, primarily for unpaid wages and termination compensation, seeking around HK$16 million. Special counters were set up at all ten regional offices to prioritize assistance.
Around ten employees, accompanied by union representatives, filed cases at the Labour Relations Division (Hong Kong East). Ms. Lee, a 22-year veteran at Taipan's Causeway Bay branch, said she was owed roughly HK$200,000 in May–June wages and allowances, urging the company's owners to address the arrears. She admitted noticing declining business but had hoped hard work could save the company. Now, she worries about finding new employment at her age.
At an event yesterday, Secretary for Labour and Welfare Chris Sun pledged full support for affected workers, including streamlined applications to the insolvency fund for emergency relief.
He added, "Labour Department colleagues reported engaging Taipan's responsible persons. We will investigate potential fund abuse—if they had the capacity but misused the process, we'll handle it concurrently."
(Source: Wen Wei Po; Journalists: Wang Xi, Yim Kai-wa, Li Qianxun, Zhang Ming; English Editor: Darius)
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