President’s Report – January 2024

It is with a sigh of relief and with great pleasure that I wish you all a very happy New Year. After 2022 and what seemed such a promising time following the Covid-19 pandemic, it is unfortunately the case that 2023 – the so-called bounce back year – did not live up to where we all hoped it would go. But it is behind us now. 2023 is finally done – it is gone and behind us.

Our beloved industry made up of establishments run by big chains to small families, and in some cases, generations of families, experienced one of its hardest years ever in 2023. From what I can gather from listening to people around the country, our issues do not stem from a shortage of customers. Each and every one of them have continued to support our industry over the last year but, unfortunately, all of that great support has not been enough in too many cases.

I have said it before, but hospitality is in our country’s DNA. We need restaurants and pubs to laugh, socialise and gather. It is what we do. However, over 250 restaurants have closed since the start of the summer alone with countless jobs lost as a result. My deepest sympathies go out to each and every one of them but, as the winter goes on, I am afraid that we are going to see it more and more. Livelihoods ripped apart, families broken up and communities shattered in the aftermath.

All is not bad; if we take a step back and acknowledge the positives of the last few weeks, it is easy to remind ourselves why we love what we do. There is nothing better than standing back and looking at your full restaurant. Customers chatting and enjoying themselves, your staff in full swing, noise reverberating around the place, the clinking of glasses and a chorus of “rocking around the Christmas tree” makes you think that everything is alright, and for the most part, it is.

Things, however, are certainly an awful lot tighter at the moment than they have ever been before. I really hope that you all have had a great Christmas and that it has been a lucrative one, because I fear that the next year is going to be another tough one. More restaurants are destined to close; it is simply inevitable. We see it on a daily basis in local news, the national media and elsewhere. At some stage, the Government will have to come to our help with strategic and meaningful supports.

The start of 2024 brings with it an increase of 12.4% in the minimum wage and in sick pay entitlements from three to five days. On May 1st, 2024, anyone with warehoused tax debt will have to pay the Revenue back in full or put a deal in place. Later in the year, we will see the introduction of the new pension scheme and the auto-enrolment of all our employees. Combine each of these with the already sky-high costs of doing business and it becomes hard to understand why anybody would consider entering our industry at the moment. Unfortunately, the Government does not see it this way and is currently determined to let us fail. Surely, sooner rather than later, they will see sense.

Our ask is not unreasonable. Nobody has ever said that running a restaurant is easy and, while we are aware that running costs will rise and fall as they do in every other industry, we are particularly vulnerable at the moment. We need support immediately. We have had to accept a rise in food costs and in wages on top of everything else that has been thrown at us. What we cannot accept or even find for that matter is the extra 4.5% of VAT. It is not there now, it was not there last year and it will not be there in 2024. We have always said that the 9% VAT rate was the correct rate for food-led businesses.

The removal of the 9% VAT rate has brought with it huge uncertainty for our industry’s future. At the RAI, we will continue to articulate the need for the return of the 9% VAT rate to political stakeholders throughout 2024 and as long as it takes. Help us send this message – you know what to do.

Wishing you all every success during this, the start of a New Year.

Yours in catering, 

Paul Lenehan

President of the Restaurants Association of Ireland