President’s Report – September 2023

The sun finally came out a little in August and our restaurants, pubs, cafes and hotels have all been busy.  However it’s hard to talk about the last month with any air of positivity considering the times that we are in. We campaigned hard but unfortunately we lost the battle on the #keepVAT9 campaign, but trust me the war is not lost. A huge amount of time has gone into saving the VAT and we will keep pushing right up until the budget.

On the surface the public have a perception that our businesses are all doing very well. This is far from the truth. Most of our restaurants are full on Friday and Saturday nights but we are still dealing with the huge cost of doing business. This seems to be the same story every month, but nothing is changing. Our electricity and food costs continue to rise, wages continue to rise and so do our food costs, our margins getting tighter and tighter, I personally have never seen things as tight as they are at the moment. It’s the same story every Monday morning, I come into work assess the week that’s just been and make a plan to go forward. I look at the reports from our three restaurants and that of the Firecastle. At first glance, everything looks great, cash flow is good, food GPs are good but when you dial into the numbers and then in to the wages, you soon realise this is not the case, and have to ask yourself what’s the point. None of us want to be busy fools.

The Restaurants Association of Ireland is extremely conscious of this, Adrian and the team have been lobbying hard, talking to the right people over the last month with an effort to maintain the VAT at 9%. Unfortunately, our calls were not listened too on this occasion. The next six weeks will be tough with restaurants having to make some tough choices to survive. Rosters will be cut, menus will be changed, opening hours adjusted and some will unfortunately close. I ask you to keep up the conversation, leave no stone unturned when talking about your daily struggles. Our industry has never had it this bad, now is not the right time to have a vat rate at 13.5%. We have spoken to government backbenchers, most of whom support the retention of VAT at 9% for food business. Over the next month we have a great opportunity to make a case for a return of the 9% VAT. From speaking with Fine Gael and Fine Fail  representatives  over the summer, they agree we have the opportunity to get this done, the decoupling of VAT is now our fight. A separate rate for food has to be sought. Currently the Department of Finance say that it can’t be done, we say it can. Nine separate countries in Europe have done so already and we now have the second highest VAT on food in Europe behind Denmark. As our costs rise it makes our business very uncompetitive to the international markets. Inflation will rise at a time when we were promised it wouldn’t and the ripple effect that it will have on the wider economy and on all the smaller supporting businesses will be felt far and wide. 

Let’s keep the fight going. All is not lost but the next six weeks are vital. Talk to whoever you can and make sure they’re listening.

Yours in catering, 

Paul Lenehan