Study: Restaurants not ripping us off

RESTAURANTS are not ripping customers off. That’s the message from a snapshot survey on the cost of a plate of food in restaurants, according to Fáilte Ireland.

The research on restaurant overheads and the cost to diners found that raw materials and labour were the biggest factors influencing prices.

Both needed to be looked at and potentially reduced, Fáilte Ireland admitted yesterday.

The study, carried out in the first few months of this year, looked at costs in 26 restaurants, just 1% of the total industry.

Food items, ingredients and beverage costs made up the largest cost at 31%, while wages and labour accounted for 25% in the typical price of a plate of food costing €20.

Fáilte Ireland said among its sample of restaurants, there was “no evidence to support a view that excessive profits were being generated in the restaurant sector”.

Certain costs like energy and wages were higher in Ireland though, compared to other European countries, the research found.

Restaurant owners also claimed they were burdened, and confused, by high local authority rates and water charges.

Aidan Pender, director of policy and industry development with Fáilte Ireland, suggested that the industry should look at reducing its supply costs as well as using less labour.

More training was needed, particularly in the area of restaurant account management, he said.

Caeman Wall, Fáilte Ireland’s economist, said: “Eating out is an integral part of the tourism experience but high food costs can have a significant impact on a visitor’s perception of Ireland.

“We now have some valuable information around food production costs to support further rigorous analysis of the issue.

“Fáilte Ireland will be sharing this data with a number of government agencies, including the Competition Authority and Forfás, to advise the formulation of future policy.”

Fáilte Ireland said it would continue to resource support programmes specifically tailored for restaurants.

Overall, the study speculated that some restaurants were making profits of between 3% and 6%.

Restaurant owners responded to the survey yesterday, warning that Ireland was the most costly place in Europe to run a business.

“President of the Restaurants Association of Ireland, Paul Cadden, said that the next six months were ‘critical’ for the restaurant sector and banks had to free up credit and increase overdraft facilities.”