Restaurants say ‘tsunami of closures’ now on the way
BUDGET 2025 is ‘a real kick in the teeth’ for the hospitality industry, according to Jamie Budd of the Vat9 group, which lobbied extensively but failed to have the rate reduced from 13.5% to 9%.
‘We did everything we could to highlight how serious the issue is for our industry,’ said the owner of Budds restaurant in Ballydehob. He now believes there will be ‘a tsunami of closures up and down the country’.
Since the vat rate was increased in September 2023, more than 600 food-related businesses around the country have already been forced to close their doors due to rising costs.
The hike in the minimum wage, and next September’s auto pension enrolment, have been described as ‘punishing’ for an industry that is labour-intensive.
‘We feel like we haven’t been heard at all,’ said Jamie, who said he, and others in the food industry, will now make this an election issue.
‘The Government doesn’t control the cost of produce or energy costs, but it does have control over the vat rate.
‘Places like Budds are being asked to pay the same rate as big hotels, which is crazy. They have completely ignored our cries for help,’ he said.
The restaurateur said the government’s offering of a new energy subsidy grant of approximately €4,000 per annum in the 2025 budget would be eroded by paying the minimum wage increase – from €12.70 to €13.50 – for 2.5 full-time people over the course of a year.
He said the amount is negligible, given that the employment of people is the single biggest cost in their businesses.
He said food businesses that have been hanging on for a break in rising costs are devastated and will now face the difficult decision of whether to close, or raise their prices.
‘There is no viable way of doing business in this climate anymore,’ he said. ‘We all want to see our staff getting fair pay, having worked on the other side of the business ourselves.
‘But at what level do we reach the tipping point at which we will not be able to provide jobs for people anymore?’ he asked. ‘Everyone in the country is going to have to put their prices up, but we don’t want to price people out either.
‘That’s the very last thing we want to do, but people are saying they can no longer afford to eat out.’
Jamie also made the point that more people are using cafés as meeting places and further closures could ‘rip the hub out of a community’ and that would have long-term consequences for communities everywhere.
