Joe McNamee: Vat cut is no bonanza, it’s a Band-Aid on a serious wound
Several years ago, I met a man in his late 60s who meets a friend he has known since childhood for coffee each week in a local cafe, a ritual begun two decades previous as changing rhythms of life, including family life and their own wellbeing, meant they no longer conducted their catch-ups over a skinful of pints on a Saturday night.
But this weekly ritual was now imperilled by their shared outrage at the “gouging” fiscal practices of the cafe, specifically, said cafe’s failure to decrease the price of their coffees on foot of the Vat reduction for the hospitality sector introduced in November 2020, a pandemic measure that continued until September 2023.
It can be tricky to unravel the multiple factors that challenge hospitality in 21st century Ireland, especially since the pandemic. They are harder again to explain to “civilians”, who so often presume “hospitality” is near enough what they do each week in feeding themselves and their families, albeit with the expectation of tastier nosh.
I tried to explain that the Vat reduction wasn’t a bonus but a bailout to a sector already losing hundreds of restaurants for good. He was having none of it, pointing out that he and every other citizen in the land were also keenly feeling the pain of rising costs, in business and in private lives, a tone of deep resentment fuelling his anger at what would eventually prove to be a massive €1.2bn handout to the hospitality industry. What about the rest of us, he kept saying? As a fully paid-up, card-carrying member of the “Rest of Us”, also struggling to cope with rising prices in all sectors, there was no gainsaying his ire at a pain too many of us have been sharing in recent years.
However, when Mícheál Martin said last October, of the then freshly announced 9% Vat reduction rate for hospitality that has just kicked in again on July 1, he expressed a hope that restaurants would pass the savings from the reduction on to their customers.
This was ignorance of an entirely different order, utterly inexcusable from the head of a Government proposing to use many, many millions of taxpayers’ money to bail out a sector, the problems of which he so patently failed to understand at a quite fundamental level. To put it simply, he didn’t seem to understand why the sector needed the money in the first place but was still prepared to rubber-stamp the cheque.
This time, the reduction is being applied with more precision. Unlike the 2020 cut, which was liberally dispensed to the entire tourism and hospitality sector, this cut focuses strictly on food-led offerings and, for example, excludes overnight hotel stays. Nor is it a temporary measure, coming as it does without an expiry date.
To be honest, the biggest problem for most restaurateurs in spending this new-found source of income is in deciding which fire to put out first. No one in the industry resents the national pay rise for staff that kicked in earlier this year; most, however, wondered how they would fund it. One highly progressive restaurateur told me the Vat would transfer to his staff as an immediate pay rise: “They deserve it. They’ve not been earning enough but I couldn’t afford to pay them more.”
Another nationally renowned award-winning restaurant has seen a 30% decrease in business since Trump started bombing Iran and has had to let three staff go. The Vat reduction will serve as a Band-Aid for wounds requiring a visit to intensive care.
Yet if you were to pass either establishment, you’d presume business was booming, every table full. It is a similar story across the country but the problem is these customers are eating less and, crucially, drinking less alcohol, the current restaurant trading model which makes up the difference between profit and loss on each meal. Restaurateurs aren’t against what are most certainly healthier lifestyle choices; it’s just that they haven’t found an alternative model of operating in such perilous economic times to make up the shortfall. That busy restaurant you pass, presuming the owner must drive a Ferrari? Like the proverbial swan, serene on the surface but, beneath, where currents are especially treacherous, paddling furiously to keep from being washed away entirely.
he ever-engaging Buena Comida Social Club pop-up in the backyard of Levis’ Cornerhouse, in Ballydehob takes place for two weeks (July 22-25; July 29-August 2). Offering ‘Tastes, Tunes and Libations’, Doxy and Danny, of BCSC, will serve up a five-courser of classic global dishes, using seasonal, fresh produce from West Cork superb producers, sound-tracked by live DJ sets.
- Email outbacklevis@gmail.com for booking form.
Taste the Wild guest chefs pop-up series takes place at Esk Mountain’s incredible woodland kitchen in a secluded forest clearing in Glengarriff, beginning (July 26, two sittings: 11am-2.30pm; 4pm-8pm) with Epi Rogan (Ex Paradiso/Glass Curtain) X Pádraig Nagle (Miyazaki).
The dynamic duo offer a fabulous foraged feast of live fire cooking, also including wild kimchi workshop (with ferments to take home) and a foraging walk to source wild produce to serve alongside fire-cooked venison. One lucky couple can avail of Esk Mountain’s divine Nook & Nest forest accommodation (minimum three-night stay).
