A tsunami of closures on the way, say local restauranteurs

A TSUNAMI of restaurant and café closures are predicted in West Cork this year as businesses struggle with increased vat rates, wage bills, product costs and energy prices.

As a result, a campaign which has been launched by a local restaurateur, calling on the government to revert to the lower 9% vat rate for the hospitality sector, is attracting huge support.

Jamie Budd of Budd’s restaurant in Ballydehob, who launched the campaign, said the higher vat rate, re-introduced last September, was a ‘slap in the face.’

‘Realistically, the reduced rate is what’s been keeping many businesses open,’ he added. ‘Staying open is not achievable now for many, if you combine it with energy costs, and the increase to the minimum wage.’

Jamie is in business for 10 years, employing 15 people in the village which has become a foodie haven. But Jamie said that restaurants, like his – where everything is made from scratch – have become financially unattainable.

They will be forced to increase prices, and cull staff in order to survive, he predicted. And he targeted the vat issue in a petition to government, as it’s a ‘very realistic approach and one that is hugely important to the survival of small independent businesses within the hospitality sector.’

Hannah Dare of Organico health food shop and café in Bantry predicted a ‘tsunami of closures this year of well-seasoned businesses’, particularly the ones making ‘real food’.

‘There’s a sense that no one cares, or has our backs. As a small business you feel completely unsupported. At this point it’s just death by a thousand cuts and that’s what’s going to finish people off,’ she said.

Gavin Moore of Monk’s Lane in Timoleague echoed her sentiments.

‘In the most financially challenging period our industry has faced, a 50% increase in vat is very harmful, and I really worry about the damage it will do to our hospitality industry, which is one of the biggest employers in the country,’ said Gavin who, with his wife Michelle, employs 25 people.

The difference the additional vat will make to the exchequer will be minimal, Gavin said, but the cost to businesses and jobs will be unquantifiable.

Read our special report on the crisis in the hospitality sector here.