Budget Plea As 'One Restaurant A Day Closes'

15th November 2010, 7:59am

The restaurant sector in the Irish Republic has issued an urgent SOS to government ahead of next month's (December) budget, which is expected to be the harshest in decades.

 Finance minister Brian Lenhihan has already warned that he plans to take €6bn out of an already ailing economy, through spending cuts and tax rises, to help repair the national finances and convince international markets the Republic is not about to follow Greece into bankruptcy. But such radical surgery is grim  news for the Restaurants' Association of Ireland (RAI), many of whose members are currently struggling to stay in business.

 In a pre-budget submission to government, the RAI claims that "one restaurant a day is closing in Ireland", and that 80% of the sector is running at a loss. The effect of this, it says, is that 21,000 Irish restaurant jobs are at risk – at a time when overall unemployment tops 450,000 – with a potential loss to the economy of €700m.

 The RAI sets out the problems besetting the sector, and what it feels needs to be done. Members, it says, pay the second highest wage in Europe, with a minimum rate of €9.32 an hour, compared to €5.38 in the UK and €1.93 in Spain. In addition, there is a premium rate of €12.42 for Sunday working, "which means many restaurants cannot afford to open on what is a prime dining out day". It wants all rates revised.

 Excise duty on wine is another bugbear, adding €4.10 to the Irish price of a standard bottle, compared to €2.57 in the UK, while wine in Spain, Portugal, Italy and Greece is duty free. The RAI is urging government to follow their lead and scrap the charge.

 It is also calling for the abolition of the €10 air travel tax, in a bid to encourage tourism. Other items on the RAI shopping list include reductions in Vat, PRSI, rates  and rents, as well as a cutback in government regulation paperwork. Restaurants, it points out, have to deal with no fewer than 27 statutory bodies.

 Given the parlous state of the Irish economy, with pensions and welfare benefits facing cuts, the restaurants' plea may evoke little public sympathy. However, a key consideration for ministers will be the importance of the sector, which, as the RAI says, "employs 64,000 people and contributes €2bn a year to the Irish economy."

Related Articles:

• 28 Sep 2010 - Richard Corrigan quits in Irish trade's 'tough times'
• 30 Jul 2010 - High wages ‘closing Irish restaurants’
• 14 Dec 2009 - Restaurants Association of Ireland launches 10 point survival plan for eateries

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