Liquidators to be appointed to two Munster businesses 

'Due to extremely high and continuously rising costs and demands across all aspects of the business, we have no choice but to close our doors'

Hospitality operators have voiced concern about the growing number of closures, with many once again calling for a reduction in Vat from 13.5% to 9%.

Nana Bea’s Café in Castleisland, Kerry, has scheduled a meeting of creditors for next week where a liquidator will be appointed to the insolvent pastel pink eatery, according to a notice by its parent company, Nana’s Bea Hive.

The business officially shuttered its doors to customers at the end of March, citing cost pressures.

“Due to extremely high and continuously rising costs and demands across all aspects of the business, staffing issues along with covid warehousing issues, we have no choice but to close our doors,” the café’s operator Patricia ‘Trish’ Higgins wrote on social media.

Ms Higgins said the “perfect storm” of post-covid challenges hampered “success and further potential of the business”.

Nana Bea’s closure is one of many in the hospitality industry this year as stubborn costs continue to bite.

Meanwhile in Ennis, Co Clare, Carries Bakery has also shut its doors. The company has scheduled a creditors voluntary wind-up of the company next week, a process that will involve the company’s assets being distributed to the shareholders.

It is unclear if financial burdens drove Caroline Gardiner to close her bakery. Ms Gardiner could not be reached for comment.

However, the company said on its website that it had to close its doors for “nearly 5 long months” during covid. When the pandemic restrictions were lifted, the company website also said “the aim is to never close again". 

Vat rates

Hospitality operators have voiced concern about the growing number of closures, with many once again calling for a reduction in Vat from 13.5% to the rate of 9% implemented during covid to alleviate some of the pressure.

The Restaurants Association of Ireland (RAI) has called for a reduced rate of Vat specifically for food-driven businesses while an online movement called Vat 9 Now has gained momentum trying to achieve the same goal.

Hospitality businesses, including Limerick-based restaurant Bella Italia and Cork-based coffee shop Alchemy, have endorsed the Vat 9 Now campaign.

Insolvency figures published last month in two seperate reports showed insolvencies are set to rebound to levels recorded before the pandemic, driven by business failures in the hospitality and retail sectors.

PwC’s Insolvency Barometer predicted insolvencies will likely reach close to 1,000 by the end of 2024 while analysis by Deloitte forecasted this figure to reach around 800. Both estimates are above 2019 levels.

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The hospitality and retail sectors make up 40% of the total number of insolvencies with 89 liquidations in total in this period, up from 68 insolvencies a year earlier, according to the PwC report.

However, some believe the wave of closures is down to timing and will not turn into an ongoing trend.

Aiden Murphy of Crowe Ireland, who has advised pubs and restaurants for more than 25 years, told the Irish Examiner in February that “we’ve come into the low point of the year for these businesses” as operators catch up on their bills".

Mr Murphy said warehousing rules meant businesses prioritised paying Vat and PAYE on time throughout 2023, which could have led to other bills racking up.