Fredericton takeout owner says unlicensed food businesses cutting corners
Rhythm Rathi | CBC News | Posted: January 7, 2025 10:00 AM | Last Updated: January 7
Province reports an increase in complaints against unlicensed kitchens
Pavan Kumar Moodalkatte says he has complained to the Department of Health six times in the past 16 months.
After opening a Fredericton takeout offering South Asian food in August, 2022, he said he has seen business at his Riverside Café steadily drop.
Moodalkatte blames that on increased competition from unlicensed kitchens.
He began complaining to health inspectors and others with the Department of Health in September 2023, about these new businesses that turn up on Facebook, WhatsApp and other social media platforms.
He said they offer the same subscription-based tiffin service he does — but they aren't following the same rules.
Moodalkatte closed his storefront operation about a year ago to focus on the subscription-based model that he says is very popular with newcomers to New Brunswick.
WATCH | 35 complaints about unlicensed kitchens in 2024, says Department of Health:
He said he invested approximately $20,000 to open his licensed commercial kitchen, which includes temperature-controlled infrastructure, along with proper lighting and cleaning routines.
But unlicensed food businesses, operating out of private homes, are charging less, he said.
In emails provided to CBC by Moodalkatte, he sent staff at the Department of Health several online advertisements for these services. In one exchange, a public health inspector responds to him, saying, "We are aware there are many people doing this online."
In a February 2024 email exchange with Kris Austin, who was minister of public safety at the time, Austin writes, "I have directed our team to step up their enforcement efforts to ensure compliance."
Rise in complaints
Moodalkatte describes the drop in his business as significant. In 2022, he said he had sales between $6,000 and $7,000 per month. Now those numbers have dropped to less than $3,000.
The Department of Health did not provide an interview, but in an emailed statement spokesperson David Kelly said there has been a steady increase in complaints about unlicensed kitchens in the past few years.
Kelly said these are often home-based food businesses that operate out of residential properties with no commercial kitchen space — selling their food through social media and websites.
In 2021, the department received two complaints. In 2022, that number rose to eight, and in 2023 there were 20 complaints. In 2024 there were 35 complaints, Kelly said.
"The department is always concerned when proper safeguards are not respected that help ensure the safety of foods that are served to the public," he said.
Kelly said every complaint received has been investigated.
"Depending on the situation, consequences could range from a verbal warning to seizure of a food product, to charges under the Public Health Act."
In an email discussion from March 2024, a regional director with Health Protection Services told Moodalkatte, "In the past couple weeks, inspectors have dealt with complaints for unlicensed facilities resulting in facility closure and enforcement activities."
Under-cutting the market
Moodalkatte said he's worried he may have to close his business.
His meal subscription tiffin service, which offers a full-course meal packed in two to six containers of varying sizes, has gone from between 20 and 25 subscribers every month to just nine.
"We have to pay rent, we have to pay insurance, we have to pay a licence fee. To keep our licence we have to follow a lot of regulations, which cost money."
Moodalkatte said he hopes people who use unregulated kitchens and food providers will think about who they are buying from.
"In a regulated environment like New Brunswick, where there are certain rules and regulations for every food premise or food business ... people don't suspect, people just go and buy stuff from wherever they can find cheap, assuming everybody's licensed," he said.
Kelly advises people call businesses to ask whether they are licensed and whether they have been inspected by Health Protection Services.
"They should be able to answer these questions. If there is no way to reach the seller, this is a red flag," said Kelly.
"Although buying foods online offers great convenience, it also has the potential to introduce serious health and safety risks."
Moodalkatte said he sees new home-based businesses advertising on social media every week.
"I don't think I can carry on for too long. If this goes on, I have no other option but to shut down."