Upon returning to work at the end of the Spring Festival holiday, Lin Ruiqi noticed that the prices of his favorite fast food had been increased again.

"The price of a set lunch, especially if it has beef in it, rose by 3-4 yuan (42-56 cents), which is 30-40 percent more compared with the price a year ago," the 26-year-old law clerk, who orders takeaway meals from nearby fast-food restaurants every day, said.

"The restaurants pass on their rising operational costs to the consumers, making us the ultimate victims," Lin said.

According to official figures, the price of cooking oil in Shenzhen surged 52.4 percent in 2007, while the price of pork increased by 51.7 percent.

Egg prices increased by 8.6 percent, while the cost of rice went up by 4.2 percent in 2007.

"There is no other way but to raise prices, but even this is not enough to offset the surging costs. Profit margins are razor-thin, and I would consider closing my restaurant if the prices of raw materials continued to rise," Liu Qiang, a restaurant-owner, said.

Local restaurants are not the only ones feeling the pinch. US fast-food giant McDonald's raised prices for some of their products at all mainland outlets from 0.5 to 1 yuan each in late January, citing the "continuously rising pressure from food costs".

The move came just three months after another adjustment of menu prices in October.

Chicken restaurant KFC raised its prices from 0.5 yuan to 1 yuan last July, but the company said it did not plan any further adjustments in the short term.

Chen Shaohua, secretary-general of the Shenzhen Catering Service Trade Association, said the across-the-board price hike reflected moves by the market.

"We have noticed the price adjustment in our industry and we think it's normal practice given the dramatically increased costs of raw materials," Chen said.

"Our association will make sure no companies raise their prices artificially. Regular price rises are a normal way for catering companies to survive the adverse environment," he said.

According to a survey by the industry in 2006, about a third of the city's 25,000 restaurant outlets were profitable, and 40 percent were breaking even.

Shenzhen Garwon Fastfood Chain Store Co, one of the largest fast-food restaurant operators in the city, said it was trying to be a responsible citizen by not raising prices.

"Any decision to raise prices will affect more than 100,000 clients who use the services of Jiawang every day. We would like to offset the rising operational costs by optimizing our internal management," assistant general manager Sun Xu told China Daily.

(China Daily March 8, 2008)