Struggling restaurants hit by high costs

RESTAURANT owners are struggling to survive as spiralling wage, tax and insurance costs endanger the industry, it was claimed yesterday.

John McKenna, who yesterday launched the 15th edition of his Bridgestone 100 Best Restaurants in Ireland, said: “Everyone thinks restaurant owners make a lot of money but they don’t. They work with really tight margins.”

Several high-profile restaurants have closed in recent weeks, including the award-winning Commons Restaurant on St Stephen’s Green and Duzy’s restaurant in Dun Laoghaire, Co Dublin.

Mr McKenna said the Government had hindered rather than helped the growth of Irish restaurants. The VAT rate on food increased by 1% to 13.5% in the last budget and the taxes on wines, a staple of almost all restaurant meals, were still far higher than in continental Europe.

The food critic said there should be a reduced VAT on food and wines to encourage the restaurant industry, which already employs 100,000 people directly.

“If you take a small restaurant in the country, it employs eight to ten people but it has a whole range of economic benefits for the area. They are really micro-industries. But why does everything for the Government have to be in an IDA park?” Mr McKenna said.

One of the most successful Irish restaurant owners is 28-year-old chef, Nevin Maguire. As well as publishing his own cookery book and presenting a television series, he regularly attracts 120 weekend diners to his restaurant in the small village of Blacklion, Co Cavan.

“He fills two local bed and breakfasts every weekend with his guests. He buys fish from Donegal, duck from a man down the road and lettuce from the local town. He is a roaring success and a classic example of how to bring money into an area. Why don’t we say ‘Let’s have more Nevin Maguires?’” Mr McKenna said.

The Restaurant Association of Ireland (RAI) echoed Mr McKenna’s remarks but said the tale of struggling restaurants was not new. Insurance costs for restaurants have increased by 150% over the last two years and the cost of ingredients and waste disposal has also risen. Wage costs have also risen steadily over the last three years due to shortages of skilled staff.

“Wage rates have increased dramatically. People have to be paid well but Irish people have to realise the difficulties restaurants are in,” RAI chief executive Henry O’Neill said.

He said the industry was looking to create more schemes like the €10, €20 and €30 value meals to maintain the numbers eating out in restaurants.