Restaurants Association of Ireland launches 10 point survival plan for eateries

14th December 2009, 3:44pm

The Restaurants Association of Ireland has launched a 10 point survival plan for the restaurant sector.

The Association has identified that over 80% of Irish Restaurants are running at a loss which puts 21,000 Irish Restaurant jobs at risk.

Adrian Cummins, chief executive of the Restaurants Association of Ireland delivering the 10 point survival plan, outlined a series of urgent actions needed now if the restaurant sector is to survive.

1.  Reduction in the National Minimum Wage and abolition of the JLC Structure and Sunday Premium Payments

• The Restaurants Association of Ireland is advocating a reduction of the minimum wage from €8.65 per hour to €7.65.
• Abolishing Catering JLC Minimum rates. Ireland is 54% higher than Spain and 23% Higher than UK.
• Abolishing the Sunday Premium Scheme. Only country in Europe that pay a premium.

2 Reduction in Local Authority Charges and Regulatory Burden

• Ireland is the most expensive country in Europe to run a restaurant.
• Waste license fee has increased from €1200 to €4000.
• Introduction of grease trap monitoring fee €870 per annum.
• Sunshine tax on outdoor seating / music performance tax / business improvement district levy.
As a first step, The Minister for Finance should instruct all local authorities to decrease commercial rates to business by 10% in 2010

3. Prioritisation of a Food Tourism Strategy as a jobs creation mechanism plus the establishment of and a dedicated restaurant division in Fáilte Ireland

• Tourism is the 2nd largest indigenous contributor to the Irish economy.
• Fáilte Ireland and Tourism Ireland continue to reinforce brand Ireland.
• Prioritisation of Food Tourism Strategy as a jobs creation mechanism.
• The establishment of Ireland the 'Food Tourism Island' brand.
• Retention of the current level of activity funded by the Fáilte Ireland and Tourism Ireland international marketing budget.

4. Removal of Air Travel Tax and Introduction of Free public transport to all over 65's who visit Ireland

• Ireland cannot afford to incur competitive disadvantage that makes routes to and from Ireland less attractive.
• By 2020, roughly 20% of the European population will be aged over 65.
• Ireland could be the first to introduce this initiative within the EU and maximize on the promotional opportunity.

5. Investment in training and development to be offset against Employers PRSI

• The Restaurants Association of Ireland is calling for investment in training to be offset against employer's PRSI.
• This will result in a highly skilled workforce and maintaining high standards in the sector.

6. Introduction of composite VAT rates on dining out

• Introduction of a composite system for determining the Vat Rate applicable on a meal i.e. if food represents > 2/3rds of the total value of a meal, a Vat rate of 13.5% should apply to the whole meal.
• Encourage the practice of dining out and a café culture.
• Reverse the trend of people buying discounted alcohol products from off-licence locations and increased home consumption of  alcohol

7. Reintroduction of recoverability of VAT on corporate dining

• U.K. companies can reclaim 100% of vat incurred on corporate dining.
• Any percentage of recoverability of VAT would create a stimulus to the sector, with little loss in tax revenues.

8. Introduction of capital allowances for investment in the restaurant sector

• Businesses operating in Ireland can qualify for Capital Allowances on the fit out of their industrial buildings.
• Restaurants are not granted the same access, at present.
• Capital expenditure incurred by restaurants has increased significantly due to, among other things, increased health and hygiene regulations, fire standards and water regulations.
• Only establishments having a special restaurant licence would qualify for such allowances.

9. An Employers PRSI rebate for maintaining jobs and an extension of the Work Placement Scheme

• Reduction of employers PRSI for those companies who have maintained their employee numbers at P35 filing time.
• Work  Placement Scheme criteria to be extended to include  small businesses with less than 10 employees.

10. Reduction in excise duty

• Reducation of excise duty on wine served as part of a meal.
• This reduction will impact on excessive home drinking as well as encouraging sensible drinking.

Adrian Cummins said: "Currently, the Irish Tourism Industry is facing a crisis, and more particularly the Restaurant and hospitality sector. This crisis has been illustrated by a recent Report of the Tourism Renewal Group which identifies 'survival' and 'recovery' recommendations." The Restaurants Association of Ireland's 10 point plan is fully consistent with the survival recommendations on:

- investment and marketing
- reducing access costs
-prioritising public spending and
supporting sustainable enterprises.
 
Restaurateurs have adapted to the downturn, by reducing costs and menu prices. A series of urgent actions are now needed as the current business environment is unsustainable.

Related Articles:

• 07 Jun 2011 - Awards ceremony recognising chef who catered for the Queen marred by protests
• 15 Nov 2010 - Budget Plea As 'One Restaurant A Day Closes'

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Drigin Gaffey

08 October 2010 at 3:10pm

I agree with most of what you are saying here. I think that the VAT and PRSI issues are big ones. It is very difficult for restaurants to be competitive when our Vat is so high. On the food front, we buy in at O% and sell at 13.5% so the odds are not in our favour there. Another major issue is overpriced long term leases. I'm not sure if anything can be done on this front, but paying over all your profit and more to landlords is just not sustainable and more good restaurants are going to have to close because of this.

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