The addition of an extra €1 in duty on a 75cl bottle of wine in Budget 2013 will lead to the closure of restaurants already struggling to stay afloat, the Chairperson of the Western Branch of the Restaurant Association of Ireland has warned.
Fergus O’Halloran, who is also General Manager of The Twelve Hotel in Barna and a Fáilte Ireland Food Ambassador for the West of Ireland, has said the latest increase in duty on alcohol will make it too expensive for many people to eat out and increase the number of people drinking at home.
“What it does, really, is encourage people just to drink at home and not go out to restaurants. There comes a point where it’s too expensive for an evening out and that’s our concern,” said Mr O’Halloran.
Mr O’Halloran said there was no doubt but the move would lead to restaurants on the edge closing their doors and consequently job losses.
He said the reduction in VAT to nine per cent on food sold in pubs and restaurants and the removal of the Sunday premium, which required restaurants to pay staff double time on Sunday, had resulted in an increase in the number of jobs created in the restaurant sector over the past two years.
The €1 increase in wine, he said, would undo this good work. “It’s a euro extra on a bottle of wine, which amounts to 25 cent a glass and that’s the killer in the sense of a glass of wine going up 25 cent is astronomical.”
The increase was equivalent to a 20 per cent increase in the price restaurateurs were paying for their wine, said Mr O’Halloran, adding that, while some restaurants would seek to absorb the price increase, many could not afford to.
“A lot of people think that the restaurant business is about food. It’s not; it’s about the selling of food and wine. A lot of times, when you’re selling your food at just enough margin to pay your wages, you need the margin on wine to cover all your other costs,” he explained.
Mr O’Halloran said the tourism industry would suffer, particularly with the Gathering scheduled for the coming year, as some rural areas may not be able to keep their restaurants open.